Updated from 4:06 p.m. EDT

Stocks closed Friday's session with losses, amid a high-profile downgrade of Intel ( INTC), some negative earnings preannouncements and a fall in consumer sentiment.

After ending Thursday's session at its highest level in 11 months, the Dow Jones Industrial Average ended down 79.43 points, or 0.9%, at 9117.12. Meanwhile, the Nasdaq fell 27.13 points, or 1.6%, to 1626.49 and the S&P 500 lost 9.90 points, or 1%, to 988.61. Friday's slide left the indices mixed on the week, with the Dow ending up 54.33 points, the Nasdaq losing less than a point and the S&P adding less than a point.

Even though sentiment has been decidedly bullish recently, markets are having trouble keeping up the momentum. The Dow is encountering resistance at 9215, which was an intraday high set last Friday. For much of this week, the Dow has hit that level, only to bounce back when support failed to hold above the key level.

"Absolutely, last Friday's reversal from a strong advance in the morning to a significant selloff in the afternoon is the key level to watch from short-term perspective," said Ken Tower, chief market strategist at CyberTrader. "The market's rallied quite strongly over the last two-and-a-half months, but the economy has to deliver here. It has to accelerate. People are looking to data to show evidence of improvement."

On Friday, data showed little improvement. The University of Michigan consumer sentiment index came in at 87.2, lower than the 93.1 expected by economists. Wholesale prices in the U.S. fell 0.3% in May, the fourth consecutive monthly decline, following a 1.9% drop in April. Lower energy and computer prices were the reason, a government report said. The core producer price index, excluding food and energy, rose 0.1% after a 0.9% drop in April.

"I'm surprised. I thought we'd get a decent rally after the consumer sentiment numbers came out. But that's the problem; they were much worse than expected," said Tower. "If they were close to expectations, the rally might have continued. People are looking for excuses to get back in."

Treasuries were higher, with the 10-year rallying 15/32, dropping its yield to 3.11%, one of the lowest levels in a half century.

Microprocessor giant Intel was downgraded to hold at Deutsche, which said the company is more likely to miss earnings estimates in the second half of 2003 than beat them. The brokerage said Intel has reached a price target of $22 and is due for "consolidation in the slow summer months." The shares fell 78 cents, or 3.5%, to $21.36.

Oracle ( ORCL) rose 15 cents, or 1.1%, to $13.48 after the company posted fiscal fourth-quarter earnings that beat estimates. The software maker also stood by its forecast for the current quarter.

But Oracle is facing opposition to its $5.1 billion hostile bid for PeopleSoft ( PSFT), which formally rejected the offer Thursday, saying the offer undervalues the company and raises antitrust issues. Meanwhile, the company PeopleSoft is trying to acquire, J.D. Edwards ( JDEC), sued Oracle to block its hostile bid, seeking $1.7 billion in compensatory damages and an unspecified amount in punitive damages. PeopleSoft dropped 45 cents, or 2.6%, to $16.92, while J.D. Edwards fell 33 cents, or 2.5%, to $13.03.

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