Updated from 4:23 p.m. EDT

Stocks in New York were sluggish for the entire session Friday and closed slightly to the downside as traders decided against making big bets after another erratic week.

The

Dow Jones Industrial Average

was down 49.27 points, or 0.41%, at 12,110.41, and the

S&P 500

was off 5.33 points, or 0.38%, to 1386.95. The

Nasdaq Composite

was down by 6.04 points, or 0.25%, to 2372.66.

On the Dow, 20 of its 30 components finished with losses, with

Alcoa

(AA) - Get Report

,

Citigroup

(C) - Get Report

and

Exxon Mobil

(XOM) - Get Report

falling 1.2%.

Meanwhile, losses in

Vertex Pharmaceuticals

(VRTX) - Get Report

,

Sirius Satellite Radio

(SIRI) - Get Report

,

Marvell Technology

(MRVL) - Get Report

and

Electronic Arts

( ERTS) combined to sink the Nasdaq.

"There's a lot of volatility, so you won't be able to take much away from today," said Robert Pavlik, chief investment officer with Oaktree Asset Management. "We're in a different mindset with a

Federal Reserve meeting coming up. Hopefully, after that we can return to a more normalized market."

Roughly 3.40 billion shares changed hands on the

New York Stock Exchange

. Decliners beat advancers by a 5-to-3 margin. Volume on the Nasdaq reached 2.09 billion shares, with losers outpacing winners 3 to 2.

Over the last five sessions, the Dow fell 1.4% and the S&P 500 eased 1.1%, compared with gains the previous week. The Nasdaq gave back 0.6% for the week.

"We had a very poor rally last week, and we've rolled over again," said Phillip Roth, chief technical market analyst with Miller Tabak. "The market has been vulnerable to a fairly lengthy decline, and the market's technical position is weak."

Earlier, the Labor Department's consumer price index for February showed no big surprises. The CPI was up 0.4%, compared with expectations for an increase of 0.3%. The core index, which excludes food and energy prices, rose 0.2%, matching expectations.

Core inflation, a closely monitored figure, is up 2.7% over the past year, unchanged from January's level and in line with expectations.

"We were a little hot on the headline side, but I don't think it changes anything one way or the other," said Paul Mendelsohn, chief investment officer with Windham Financial.

The data follow the latest reading of the producer price index, which rose a greater-than-expected 1.3% last month. The core PPI was up 0.4%, also ahead of forecasts. The PPI report measures inflation at the wholesale level.

The CPI is considered the more important of the two when it comes to influencing Fed decisions on interest rates, but both are factored into the central bank's planning.

Both reports come before the next scheduled Federal Open Market Committee meeting on Wednesday. The Fed is expected to leave interest rates unchanged at 5.25%.

"This number will not aid the market today," said Barry Hyman, equity market strategist with EKN Financial. "The year-over-year figure is not in the Fed's comfort zone. We need to put aside the notion that the Fed will lower rates."

Treasury prices showed little reaction to the CPI data. The 10-year note was down 2/32 in price, yielding 4.55%, and the 30-year bond was down 1/32, yielding 4.69%. The dollar was lower against the world's major currencies.

Elsewhere on the economic docket, the Fed said industrial production rose 1.0% in February, beating the 0.3% consensus. Capacity use rose to 82.0% from 81.4%, also higher than expectations.

Just after the open, the University of Michigan said the preliminary read on its consumer sentiment index for March fell to 88.8 from 91.3 last month, slightly below the consensus expectation of 89.0.

Also playing a role in traders' planning was the expiration of four separate derivatives contracts, an event known as quadruple-witching. Single-stock futures, stock options, index futures and index options all were trading for the last time, an event that happens quarterly and can lead to considerable volatility.

Markets in Asia were mainly lower. Tokyo's Nikkei 225 was down 0.7% at 16,744, and Hong Kong's Hang Seng lost 0.1% to 18,954. In Europe, London's FTSE 100 was off 0.1% at 6130, and Frankfurt's Xetra DAX was lower by 0.1% at 6579.

During the last two weeks, stocks around the globe have been shaky amid general concerns about the global economy and a corresponding lessening appetite for risk. In the U.S., worries about a shakeout in the subprime-mortgage sector have weighed on investors.

Earlier this week, the Dow dropped below 12,000 for the first time since November before recovering. On Thursday, the industrials added 26.28 points, or 0.22%, to 12,159.68.

The S&P 500 was up 5.11 points, or 0.37%, to 1392.28 on Thursday, and the Nasdaq rose 6.96 points, or 0.29%, to 2378.70.

On the corporate side, subprime remained in the news, as

Accredited Home Lenders

( LEND) said it will sell $2.7 billion of loans at a discount to alleviate the pressure from margin calls. Shares jumped 15.6% to close at $10.90.

Apparel seller

AnnTaylor

(ANN)

topped estimates for the latest quarter, with earnings of 31 cents a share on sales of $610.5 million. The retailer also raised its forecast for the fiscal year. AnnTaylor finished up $2.93, or 8.2%, to $38.60.

Turning to research calls, Goldman Sachs added

Starbucks

(SBUX) - Get Report

and

Federated Investors

(FII) - Get Report

to its conviction buy list, while removing

McDonald's

(MCD) - Get Report

and

AllianceBernstein

(AB) - Get Report

.

Starbucks gained 3.4% to $30.58, and McDonald's was fractionally higher to finish at $43.48. AllianceBernstein fell 1.3% at $82.37, and Federated Investors eased 0.4% to close at $35.78.

Deutsche Bank

(DB) - Get Report

was upgraded to buy from hold at Citigroup and rose $1.54, or 1.3%, to $125.06.

Crude prices were lower in choppy trading, extending the previous session's decline. Oil lost 44 cents to $57.11 a barrel. Natural gas was off 3.5 cents to $6.92 per million British thermal units. Gold rose $6.80 to $653.80 an ounce.