Stocks fell on Friday, with the Dow industrials and the S&P 500 set for their fourth weekly drop, after Chevron's warning about its second-quarter results prompted investors to sell some energy shares.

Investors' mood also was soured by fresh data showing July consumer sentiment hit its lowest level since March.

The news underscored concerns that an economic recovery and corporate profits in the second-quarter earnings season will be weak with little cause for optimism about results for upcoming quarters.

David Katz, the chief investment officer of Matrix Asset Advisors in New York, said he didn't think many companies would raise their outlooks in the reporting season.

There's no incentive to step up and talk up the future, especially because there's low visibility, he said. Our expectation is that companies are going to do what they've been doing: beating expectations, but setting a low bar and being cautious.

The data from the Reuters/University of Michigan Surveys of Consumers was a concern for investors, as a return to strong consumer spending is considered crucial for a recovery.

The Dow Jones industrial average <.DJI> slid 54.94 points, or 0.67 percent, to 8,128.23. The Standard & Poor's 500 Index <.SPX> fell 5.33 points, or 0.60 percent, to 877.35. The Nasdaq Composite Index <.IXIC> was down 2.11 points, or 0.12 percent, at 1,750.44.

The S&P 500's recent rally of nearly 40 percent from a 12-year closing low in early march has stalled as investors failed to find hard evidence that the economy is recovering at a healthy pace.

Energy shares were the biggest losers in the S&P 500, pressured both by a drop in crude oil prices and after Chevron warned that second-quarter earnings would be hit by a sharp decline in U.S. refining margins. The company also said that any benefit from higher oil prices would be largely offset by a weaker dollar.

Chevron's stock fell 3 percent to $61.18 and was the Dow's top percentage decliner.

August crude futures lost 91 cents, or 1.5 percent, to $59.50 per barrel and were poised for their biggest weekly fall since January.

The S&P Energy Index <.GSPE> dropped 1.5 percent.

Losses in technology shares, however, were limited following a round of positive comments from analysts.

Goldman Sachs upgraded both the software and hardware sectors to attractive while shares of Internet company Yahoo gained 3.3 percent to $15.03 on an upgrade from Thomas Weisel.

On the downside, International Business Machines Corp fell 1.6 percent to $100.47 after Goldman downgraded it to neutral from buy.

(Editing by Jan Paschal)

Investment Fall Goldman sachs Chevron