"We have a Fed decision on Tuesday; who is going to make a big bet now? So we have a lot of folks sitting on their hands," said Art Hogan, chief market strategist at Jefferies & Co.
The Dow Jones Industrial Average gained 5.7 points, or 0.04%, to finish at 13,625.6, giving the blue-chip index a weekly gain of 1.9%.
Of the Dow's 30 components, 13 ended a choppy session with gains, led by Alcoa Inc. up 2.9%.
American Express Co. fronted losses on the Dow, its shares sliding 4.3%.
Amex's decline followed a downgrade by Merrill Lynch analysts, who advised clients to sell that stock as well as shares of Discover Financial Services and Capital One Financial Corp. on the view that consumer spending would deteriorate and lead to a recession next year. .
The S&P 500 fell 2.68 points, or 0.18%, to 1,504.66, giving it a 1.6% gain on the week, while the technology-heavy Nasdaq Composite fell 2.87 points, or 0.11%, to 2,706.16, a weekly climb of 1.7%.
A shipping delay for one of its products was among the factors weighing on one tech stock. Palm Inc. shares were off 12.8% in the wake of its late-Thursday announcement, which included word of a net loss for its latest quarter. .
Elsewhere in the tech sector, Macrovision Corp. shares ended 21.4% lower after it said it would buy larger company Gemstar-TV Guide International Inc. for $2.8 billion in cash and stock. Shares of Gemstar-TV Guide also fell, ending 16.6% off. .
On the New York Mercantile Exchange, crude-oil futures fell nearly $2, with the contract for January ending the session down $1.95, or 2.2% at $88.28 a barrel. .
Elsewhere on the NYME, gold futures also declined, falling $6.9, or 0.9%, to end the session down at $800.2 an ounce.
Volume on the New York Stock Exchange topped 1.2 billion shares, with advancing stocks just ahead of those declining. On the Nasdaq, nearly 1.9 billion shares traded hands, and decliners topped advancers 15 to 14.
After rising early on, stocks fell as investors resorted to profit-taking after a two-day rise amid diverse data, including slight payrolls growth in November and a drop in consumer sentiment in December.
"We're looking at a market that is getting a little overstretched, so I wouldn't be surprised to see some profit-taking," said Peter Cardillo, chief market economist at Avalon Partners.
U.S. equities have risen in recent days, with the Dow climbing 371.16 points during the past two sessions, with investors anticipating the Federal Reserve would cut interest rates for a third time this year at its next meeting on Tuesday. .
Ahead of the opening bell, the Labor Department reported the addition of 94,000 nonfarm payroll jobs last month and said the unemployment rate held steady at 4.7%. Economists expected the rate to climb to 4.8%. .
The data "points to an economy that is not slipping into a recession anytime soon, but we're likely to see some sort of a pullback here because most of the news is already digested, and a rate cut is already priced in," said Cardillo.
A later survey released by Reuters and the University of Michigan had consumer sentiment continuing to drop in December, with an index falling to 74.5 last month from 76.1 in November. The latest reading proved worse than the forecasted 75 level, and is the second lowest since 1992. .
"Surging gasoline prices, falling stock prices, and lingering credit market turmoil are continuing to weigh on this measure," said analysts at Action Economics.
Late afternoon data had the Federal Reserve reporting consumer credit rose $7.7 billion in October on increased credit card debt, with an overallhike of 2.3% pushing total outstanding consumer credit up to $2.49 trillion in October.
European stocks returned to gains after a one-day hiatus, helped by Thursday's strong finish for U.S. stocks. .
In Asia, stocks closed mostly higher. .
By Kate Gibson