NEW YORK – Stocks extended their losing streak to four days Friday after a mixed batch of readings on consumers further muddled investors’ sense of the economy.

The major stock indexes fluctuated throughout the day before closing slightly lower. The Dow Jones industrial average fell nearly 17 points and has now lost almost 400 over four days. It was a typically slow summer Friday, but only partly due to vacations. Traders who were working had little reason to make any major moves because economic data remains confusing.

One of the biggest obstacles to a strong economic recovery is weak consumer spending. Friday’s reports about consumers’ attitudes and spending didn’t point to a shopping rebound anytime soon.

The Commerce Department said that retail sales rose 0.4 percent in July. That was an improvement after two months of sales declines, but just below economists’ forecast of a gain of 0.5 percent. While the report showed strength in auto sales due to buyers’ incentives, it also showed that consumers are shying away from other purchases.

Some better news came from the University of Michigan/Reuters survey of consumer sentiment for the first part of August, which showed consumers are slightly more optimistic. An index based on the survey came in at 69.6, slightly above analysts’ estimates and up from July’s 67.8.

But retailer J.C. Penney Co. lowered its earnings forecast for the year, citing expectations that consumer spending will be slow. J.C. Penney joined competitor Kohl’s Corp., which lowered its earnings outlook on Thursday.

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These latest reports fell in line with a long string of conflicting data that has left investors unsure about where the economy is headed. Consumer spending has remained weak along with the labor market. And there are no signs that employers are ready to start hiring at a pace to help lift the economy.

Although J.C. Penney and Kohl’s were disappointments for investors, second-quarter earnings overall have been strong and company executives are optimistic. The split between economic and earnings numbers has added to investors’ murky view of the economy.

“We’re in a fragile market,” said Steven Goldman, chief market strategist, Weeden & Co. in Greenwich, Conn. He noted that the market’s decline is feeding the lack of confidence among consumers and investors.

The major indexes’ performance for the week shows how turbulent the market has been. The Dow is down 3.3 percent, while the S&P 500 is off 3.8 percent. The Nasdaq composite index had the steepest drop, 5 percent, in part because of a cautious economic outlook from Cisco Systems Inc.’s CEO, John Chambers. He echoed the words used last month by Federal Reserve Chairman Ben Bernanke, who called the outlook for the recovery “unusually uncertain.” Cisco, which makes networking equipment, is seen as an economic bellwether.

 


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