Stocks End Week With Losses

Rather, people are taking advantage of gains made in the spring rally and are now more comfortable sitting on the sidelines again, says Sharma. However, that presents a problem, because if institutions aren't buying stocks, then hedge funds and momentum traders are dominating the market, he says. "And a lot of those traders don't look at fundamentals, the try to trade off of a trend."

Not helping to alleviate economic and earnings jitters, Chevron cautioned late Thursday that it faces "significantly lower" results from its refining and marketing operations in the second quarter and that earnings gains from higher oil prices were "largely offset" by unfavorable currency effects.

Also Infosys (INFY Quote), India's second largest outsourcing firm, reported an increase in profit and beat top-line expectations, sending shares up 4.2%, but warned that the economic slowdown would result in a steep revenue drop.

More fuel for the bears, the University of Michigan's preliminary consumer sentiment index for July fell unexpected to 64.6 from 70.8, vs. expectations for a minuscule decline.

Meanwhile, the U.S. trade deficit narrowed unexpectedly in May to $26 billion, its lowest reading since 1999, down from $28.8 billion and vs. expectations for an expansion to $30 billion as exports increased and imports scaled back.

However, the Department of Labor said separately that import prices increased 3.2% in June, more than expected, due largely to rising oil prices. Export prices increased 1.1% after rising 0.05% the month prior.

Quarterly reports will be more plentiful next week, starting with Charles Schwab (SHHW Quote) on Monday and Goldman Sachs(GS Quote), Johnson & Johnson (JNJ Quote), and Intel (INTC Quote) on Tuesday.