1st LD Writethru: U.S. stocks decline on soft data, surging dollar

U.S. stocks ended lower Friday, with both the Dow Jones Industrial Average and the S&P 500 turning negative for the year, as economic data came out weaker-than- expected while the U.S. dollar regained its strength.

The Dow Jones Industrial Average dropped 145.91 points, or 0.82 percent, to 17,749.31. The S&P 500 shed 12.55 points, or 0.61 percent, to 2,053.40. The Nasdaq Composite Index was down 21.53 points, or 0.44 percent, to 4,871.76.

U.S. consumer sentiment decreased to a four-month low in March. The Thomson Reuters/University of Michigan's preliminary consumer sentiment index fell from 95.4 in February to 91.2 in March, well below market consensus of 96.0.

Meanwhile, the Producer Price Index for final demand fell 0.5 percent in Febuary on a seasonally adjusted basis, missing estimates of a 0.3-percent gain, the U.S. Labor Department reported Friday. Final demand prices moved down 0.8 percent in January and 0.2 percent in December.

"The one-two punch of lower energy prices and a strong dollar have come ashore to the US in the form of deflation. Just as the Federal Reserve was gearing up to raise interest rates, both the CPI and PPI have gone negative for the first time since the recession, and the trend does not look likely to abate anytime in the near future," said Jay Morelock, an economist at FTN Financial, in a note.

Dampening investor sentiment, the dollar renewed its rally on Friday. The dollar soared against most major currencies as the Federal Reserve policy meeting next week spurred market expectation for an earlier interest rates hike this year.

The euro declined against the U.S. dollar to the lowest level since January 2003 amid monetary policy divergence and rising concerns for Greece.

In Europe, Greece remained in the spotlight. The European Commission President Jean-Claude Junker said Friday in Brussels that he was not satisfied with the developments in recent weeks over bailout talks when he welcomed visiting Greek Prime Minister Alexis Tsipras.

For the week, the blue-chip Dow, the broader S&P 500 and the tech-heavy Nasdaq registered their third straight weekly losses, down 0.6 percent, 0.9 percent and 1.1 percent, respectively. Endite