Dow retreats from 10-day rally; JPMorgan weighs

NEW YORK (Reuters) - Stocks slipped on Friday, ending the Dow Jones industrial average's longest winning streak since 1996 as investors paused just below the S&P 500's record high.

A decline in JPMorgan Chase shares after the bank was hit by a one-two punch of bad news also weighed on the market.

A day after ending within 2 points of the all-time closing high of 1,565.15 hit in October 2007, the benchmark S&P 500 ended Friday's session about 5 points away. For the week, the S&P 500 rose 0.6 percent.

The Dow snapped its 10-day winning streak, when it racked up a series of all-time highs. Equities have rallied since the start of the year on signs of improvement in the economy and supported by the Federal Reserve's efforts to bolster the recovery.

Investors could use the pause to consolidate bets before pushing the market higher again, said Cam Albright, director of asset allocation at Wilmington Trust Investment Advisors in Wilmington, Delaware.

"I don't think that one or two days' movement is really going to change the underlying momentum of this market, which I still think is pretty strong at this point," Albright said.

JPMorgan Chase & Co (JPM.N) was the biggest drag on the S&P 500 and one of the biggest weights on the Dow, falling 1.9 percent to $50.02.

The Federal Reserve told JPMorgan and Goldman Sachs Group Inc (GS.N) that they must fix flaws in how they determine capital payouts to shareholders, though the central bank still approved their plans for share buybacks and dividends.

A Senate report alleged that JPMorgan had ignored risks, misled investors, fought with regulators and tried to work around rules as it dealt with mushrooming losses in a derivatives portfolio. A former top JPMorgan official told lawmakers on Friday she was not to blame for the losses.

In contrast, Goldman shares recovered from early weakness to gain 0.5 percent to $154.84. The stock of rival Bank of America (BAC.N) rose 3.8 percent to $12.57. The S&P financial sector index .SPSY edged up 0.3 percent.

The Dow Jones industrial average .DJI slipped 25.03 points, or 0.17 percent, to 14,514.11 at the close. The Standard & Poor's 500 Index .SPX shed 2.53 points, or 0.16 percent, to 1,560.70. The Nasdaq Composite Index .IXIC dropped 9.86 points, or 0.30 percent, to end at 3,249.07.

For the week, the Dow rose 0.8 percent and the Nasdaq gained just 0.15 percent.

Volume was robust because of 'quadruple witching' - the quarterly settlement and expiration of four different types of March equity futures and options contracts.

Roughly 8.2 billion shares traded on the New York Stock Exchange, the Nasdaq and the NYSE MKT, compared with the 2012 average daily closing volume of about 6.45 billion.

Supporting the Nasdaq, shares of Apple Inc (AAPL.O) rose 2.6 percent to $443.66.

Data from Thomson Reuters' Lipper service showed investors in U.S.-based funds poured $11.26 billion of new cash into stock funds in the latest week, the most since late January.

A busy day of economic reports reinforced investors' view that the economic recovery has momentum to it. Manufacturing output bounced back in February, though the pace of manufacturing growth in New York state cooled slightly in March and consumer sentiment fell.

The S&P 500 retail sector index .SPXRT lost 0.8 percent after the consumer sentiment data from Thomson Reuters/University of Michigan.

Consumer prices registered their biggest increase in nearly four years as the cost of gasoline rose. But a smaller gain in the core U.S. Consumer Price Index, which excludes volatile food and energy prices, left the door open for the Federal Reserve to continue its bond-buying program, which has contributed to the stock market's rally.

(Editing by Jan Paschal)