Updated from 4:03 p.m. EDT

Stocks closed near their starting levels Friday as traders coasted through a low-volume session ahead of the holiday weekend after pushing the market higher throughout the week.

The

Dow Jones Industrial Average

dropped 16.75 points, or 0.16%, to 10,188.45; the

S&P 500

ended down 0.64 points, or 0.06%, to 1120.64; while the

Nasdaq Composite

rose 2.24 points, or 0.11%, to 1986.74. The 10-year Treasury traded down 12/32 with the yield up to 4.65%.

As expected, volume was light; just under 1.2 billion shares traded on the

New York Stock Exchange

, where advancers outnumbered decliners by about 3 to 2. On the Nasdaq, more than 1.2 billion shares changed hands, and advancers held a slight edge over decliners.

The S&P slipped into the red moments before the closing bell, barely missing a chance to extend its winning streak to seven days in a row. But all the major indices posted weekly gains for the first time in a month. The Dow added 2.2%, snapping a five-week losing streak and resting safely back above its 10,000-mark. The S&P broke a four-week losing streak, up 2.4%, and the Nasdaq embarked on a two-week winning streak, up 3.9%.

In May, the S&P added 1.2% and the Nasdaq advanced 3.5%, while the Dow suffered its third losing month in a row, down 0.4%. The S&P remains the only major stock index that holds gains in 2004.

Strength in semiconductors held the Nasdaq aloft Friday, with the Philadelphia Semiconductor Index up 1.3%, and oil services stocks recovered, sending the Amex Oil Services Index up 1.5%. Meanwhile, health care stocks dragged on the markets, with the

iShares S&P Global Healthcare

(IXJ) - Get Report

basket down 1.1% and the Amex Airline Index dropped 1.2%.

Peter Cardillo, chief market analyst at S.W. Bach & Co., said he was cheered by some strong economic data but the good numbers were overshadowed due to the long weekend and recent warnings about terrorist activities.

"I think ahead of a long weekend, even in normal times, people generally don't want to make commitments," said Cardillo. "But in these abnormal times, when talk of terrorism gets tossed around, it becomes even more different for the market to make any headway."

The government reported before the opening bell that personal incomes grew slightly more than estimates in April, up 0.6% compared with 0.4% in March. Economists were expecting incomes to increase 0.5%. Meanwhile, personal spending rose 0.3%, above Wall Street's consensus estimate of 0.2%. In March, spending jumped by a revised 0.4%.

Also on the economic front, the University of Michigan said its revised consumer sentiment index for May fell unexpectedly from 94.2 to 90.2. Economists expected the index to stay flat for the month. Separately, the Chicago Purchasing Managers Index also surprised Wall Street, jumping to 68 in May, from 63.9 in April, after consensus estimates called for a moderate decline.

In other markets, oil prices were up 44 cents to $39.88, following a three-day slide on perceptions the Organization of Petroleum Exporting Countries will increase production. Gold prices dropped, while the dollar was lower against the Japanese yen but slightly higher against the euro.

On the corporate front, there are few earnings reports.

Frontier Airlines

(FRNT)

reported a narrower fourth-quarter loss. The Denver-based carrier had a net loss of $5.8 million, or 16 cents a share, vs. a loss of $13 million, or 44 cents a share, a year ago. Excluding items, the company lost 8 cents a share. Analysts expected a 4-cents-a-share loss. Shares fell 6 cents, or 0.6%, to $9.30.

In other news, shares of

Southwest Airlines

(LUV) - Get Report

lost 15 cents, or 1%, to $15.51 after announcing that it is offering about 33,000 of its 34,000 employees cash and other perks if they quit to help the carrier manage overstaffing in some jobs.

Novellus Systems

(NVLS)

raised its second-quarter revenue and profit target after the bell Thursday, citing strength in Asian and American markets. The semiconductor manufacturing company now expects earnings of 25 cents to 27 cents a share, excluding items, on revenue of $325 million to $335 million. That tops its previous outlook of earnings of 18 cents to 20 cents a share on revenue of $305 million to $325 million. Its shares gained $1.91, or 6.1%, to $33.29.

Overseas, European markets closed lower. London's FTSE 100 was off 0.5% at 4431 and Germany's Xetra DAX was down 0.3% to 3901. In Asia, Japan's Nikkei closed at 11,309, posting a 1.3% gain. Hong Kong's Hang Seng added 1.1% to 12,116.

On Tuesday, at 10 a.m. EDT, the government is expected to report that construction spending rose 0.4%, down from the 1.5% jump logged in March. Also, the Institute for Supply Management will report the May results of its manufacturing index, which is expected to dip to 61 from the 62.4 reported for April. Despite the decline in the index, a gauge of activity in the nation's industrial sector, any reading over 50 signals economic expansion.

The markets will be closed in observance of Memorial Day on Monday.