U.S. stocks closed lower on Friday, failing to hold highs touched during the session, as investors eyed inflation data and Fed Chair Yellen's speech ahead of the long weekend. ( Tweet This )
"The narrative is you're getting a market that's looking for a liftoff in September and we're technically sailing," said Art Hogan, chief market strategist at Wunderlich Securities. "The most important thing (this week) was stability in the dollar and yields."
Hogan said it was "constructive" that the stock market continues to trade near highs despite mixed economic data.
After a pause in its recent accelerated rise, the dollar rose on Friday to post its first positive week in six. The greenback index gained more than 1 percent with the euro lower at $1.10.
Stocks moved little following an afternoon speech by Federal Reserve Chair Janet Yellen that said a rate hike would be appropriate this year if the economy improves. She noted that first quarter weakness was largely transitory and that it would take several years for rates to return to normal.
"Basically she didn't say anything really, really new," said Peter Cardillo, chief market economist at Rockwell Global Capital.
The S&P 500 and the Nasdaq failed hold gains in the close. Earlier, both indices extended gains to trade higher, with the Nasdaq briefly above its record close of 5,092.09.
The Dow closed near its lows for the day, about 50 points lower, despite Goldman Sachs ending about 1.4 percent higher at a 52-week high to lead blue chips gains. Financials were the week's third-best performing sector in the S&P.
"The financials have been quite strong all week," Cardillo said. "The market is looking ahead (and thinking) there will be monetary (policy) change this year. That's probably why we're seeing this strength in financials.
Art Cashin, director of floor operations at UBS, said the 0.8 percent decline in the Dow transports was weighing on equities. Pressured primarily by airlines, the index lost about 2.3 percent this week, its worst since March 27.
The transports are down 6.7 percent in the last six months, versus the Dow Jones industrial average's approximately 2.4 percent gain.
"Transports are a direct link to the economy... if we're not shipping as many products we're hurting transports," said Lance Roberts, general partner at STA Wealth Management. "This is really the big thing that worries me." He expects a slight correction this summer.