Stocks dipped, briefly extending losses, after the University of Michigan's consumer sentiment report came in at 88.6, the lowest in 7 months.
"I think most market participants are going to focus more on the meaningful numbers than the surveys," said Ben Pace, chief investment officer at HPM Partners. The industrial production data "connotes an economy that isn't growing fast enough for the Fed to tighten soon."
Adding to the week's disappointing economic reports, industrial production fell 0.3 percent in April, the fifth straight month of declines as reduced mining and utilities output weighed, Reuters said. Expectations were for a gain of 0.1 percent.
Empire Manufacturing data showed a reading of 3.09, below expectations of 5 but above last month's negative figure.
"The data generally has not seen the bounce (economists expected)," said Marie Schofield, chief economist at Columbia Threadneedle Investments, noting more pressure from the dollar and oil than from seasonal factors. "To the degree that there's a bounce from weather, that's not much of a bounce."
The abatement of some of those pressures keeps the economy on track for longer-term growth.
"It's a one-time hit because eventually investment spending in the energy sector will stop falling," said David Lefkowitz, senior equity strategist at UBS Wealth Management Americas, referring to the industrial production data. "There still are plenty of wells that are still quite attractive. On top of that we've seen oil prices rise."
Crude oil settled down 19 cents at $59.69 a barrel, eking out a weekly gain for an unprecedented 9th week in a row, according to Reuters data going back to 1983.
The commodity is up about 34 percent since the lows of the year. Prices held steady on Friday after oilfield services firm Baker Hughes reported drillers took off 8 rigs out of U.S. oilfields, continuing a decline of more than 5 months.
U.S. Treasury yields extended recent declines, with the 10-year yield edging lower to 2.14 percent and the 30-year yield at 2.92 percent. The German 10-year bund yield declined to 0.62 percent.
On Tuesday, bond yields hit six-month highs of 2.366 percent on the U.S. 10-year and 3.128 percent on the 30-year. Most analysts said the moves in the fixed-income market remain within a range.
"The market is reflecting a calmer bond market situation. Yields are down again. That should be supportive to the market," said Peter Cardillo, chief market economist at Rockwell Global Capital.
The major stock indices fluctuated around the flatline, with the S&P trading briefly topping its closing high set on Thursday but holding below its intraday record.
"One of the reasons stocks are going higher is people are reallocating out of fixed income," said JJ Kinahan, chief strategist at TD Ameritrade. "The dollar hasn't had the volatility we've had in bonds."
The U.S. dollar declined for the fifth straight week, the longest weekly losing streak since December 2013. The euro gained to $1.1448.
Analysts also noted options expiration on Friday as a factor behind market movements.
Stocks rallied on Thursday, with the S&P 500 closing at a record of 2,121.10, as investors cheered weakness in the dollar and calmer bond markets, amid mixed data.
"This breakout is now confirming the interest rate surge is now done with," said Lance Roberts, general partner at STA Wealth Management, noting a similar stabilization in the dollar rally.
If the S&P can close above 2,115 on Friday, there is a short-term bullish bias for the market, he said.