US Stocks end lower as bank shares weigh (ext)

NEW YORK (CNNMoney) -- Stocks finished lower Friday, ending a down week for the major indexes, as weakness in the banking sector weighed on the market.

Shares of JPMorgan Chase (JPM, Fortune 500) fell 9% after the firm disclosed a $2 billion loss late Thursday. CEO Jamie Dimon cited "errors" and "bad judgment" in trades meant to hedge risk.

The news raised questions about whether conditions since April would cause additional not-yet-reported losses at other big banks. 

The Dow Jones industrial average (INDU) fell 34 points, or 0.3%, to end at 12,820. The S&P 500 (SPX) lost 5 points, or 0.3%, to 1,353. The Nasdaq (COMP) inched up less than one point to end little changed at 2,934.

Stocks opened lower Friday but rebounded after a key index of consumer confidence unexpectedly rose to a four-year high in May. Investors also welcomed a report that showed inflation remained subdued in April.

"I don't see a lot of conviction out there," said Bernard Kavanagh, vice president of portfolio management for St. Louis-based broker Stifel Nicolaus. "It doesn't seem like anyone is willing to make any big moves either way."

Traders said the overall tone was cautious as the debt crisis in Europe continues to hang over the market.

Spain announced plans Friday to require banks to set aside an additional €30 billion to offset potential losses. The government will also hire two independent auditors to review the banks' assets, in an effort to assure investors about their viability.

Greek politicians are still struggling to form a coalition government, which makes the future of austerity measures and a European bailout unclear.

In China, a report showed an unexpected drop in the rate of industrial production growth, which could feed fears of a so-called hard landing for the world's No. 2 economy.

"I think we continue to head lower because Europe is still a problem and the global economy is slowing down," said Peter Boockvar, chief market strategist with Miller Taback & Co.

Oil for June delivery lost 95 cents to end at $96.13 a barrel.

Gold futures for June delivery tumbled $11.50 to settle at $1,584 an ounce.