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Stocks Cap Down Week With Mixed Finish

NEW YORK ( TheStreet) -- Stocks closed mixed Friday as the highest reading on consumer sentiment in more than four years limited the fallout from JPMorgan Chase's (JPM - Get Report) surprise $2 billion trading loss.

The performance capped a second consecutive week of losses for the major U.S. equity indices with trading driven by resurgent worries about Europe following transformational elections in France and Greece that cast doubt on region's ability to commit to austerity. There were also signs of growing cracks in the Spanish banking system.

The Dow Jones Industrial Average fell 34 points, or 0.27%, to close 12,820.60. The blue-chip index fell 1.7% for the week, and is now up 4.9% so far in 2012.

The S&P 500 lost 4.6 points, or 0.34%, to finish at 1353.39. The index lost 1.1% on the week, and is up 7.6% year-to-date on a price basis.

The Nasdaq rose less than a point, or 0.01%, to settle at 2933.82. It slumped 0.8%% on the week, and stands with a gain of 12.6% for 2012.

Breadth within the Dow was negative with 18 of the index's 30 components moving lower. JPMorgan was the big drag, losing 9.3%. Bank of America (BAC - Get Report) suffered as well, down 2%.

Cisco (CSCO) fell another 1.8%, adding to Thursday's deep decline following its weak outlook for the current quarter.

The biggest percentage gainers among the blue chips were clustered in tech, led by Intel (INTC), Microsoft (MSFT), AT&T (T) and Verizon (VZ).

In the broader market, the number of losers outpaced winners by a ratio of 1.5-to-1 on the New York Stock Exchange and was 1.4-to-1 on the Nasdaq.

On the macro front, the University of Michigan consumer sentiment index rose to 77.8 in May from a prior reading of 76.4 in April -- much stronger-than-expected -- and the highest level since January 2008. Economists, on average, thought the reading would tick down to 76 and generally attributed the rise that happened instead to the recent drop in gasoline prices.

Amna Asaf, an economist at Capital Economics, warned though that if equity prices continue on their downward trend, any further fall in gasoline prices may not be enough to hold up consumer confidence for much longer.

"Overall, [the preliminary reading is]encouraging, but we suspect that the final reading of confidence, which will be more affected by the most recent slump in stock markets, could be notably weaker than this."

Dan Greenhaus, chief global strategist at BTIG, added that if the labor market remains weak and the stock market declines further, there is an almost "assured guarantee that sentiment would move lower in tandem."

In other U.S. economic news, the Labor Department reported that the producer price index for April fell 0.2%, when economists, on average, expected it to be flat. The core PPI, which excludes food and energy, rose 0.2% as expected.

The lower headline number was driven by energy prices, which fell 1.4%. Eric Green, chief economist at TD Securities, expects that over the coming months, the PPI will continue to trend lower.

"That is good for profit margins in a time of rising unit labor costs," said Green. "On the retail side it is a positive for real income growth."

In Europe, London's FTSE rose 0.6% and the DAX in Germany settled up 0.95%.
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