NEW YORK — Caution reasserted itself on Wall Street Friday, sending stocks sharply lower but not enough to prevent the market from notching its third straight weekly advance.

Major market indexes fell about 2 percent, but most analysts agreed the pullback was a natural response to the market's powerful climb this month. Financial and technology stocks led the retreat, and energy shares fell along with the price of oil.

According to preliminary calculations, the Dow fell 148.38, or 1.9 percent, to 7,776.18. The index is up 17.3 percent in the last three weeks, its best gain since September 1982 and its longest string of advances since May last year.

The Dow is still up 10 percent for the month. The last time the blue chips gained at least 10 percent in a month was in October 2002.

The Standard & Poor's 500 index fell 16.92, or 2 percent, to 815.94. Despite the decline on Friday, the index's overall gain of 20.6 percent over the past 14 trading days is its best run over that length of time since 1938.

The Nasdaq composite index dropped 41.80, or 2.6 percent, to 1,545.20.

A dip in personal incomes and a slowdown in personal spending gave investors reason to cash in some of their winnings after the Dow Jones industrial average surged 21 percent over just 13 days. Analysts said the sentiment in the market was still more upbeat than it was a month ago, but the economic numbers were a reminder that the economy and the banking system remain troubled.

"There is still a definite caution in the air," said Doreen Mogavero, president of Mogavero, Lee & Co., a New York floor brokerage, adding that she's noted some hesitance among her clients. "I don't think people are completely invested yet."

Mogavero noted that the money that has gone into the market over the last few weeks has been "short-term" in nature, which leads her to believe that most people are not convinced that the economy will soon recover.

The market has been ratcheting up and down over the past week. Analysts weren't surprised by its retrenchments, including Friday's, because no one expects such a weak market to move consistently higher. And many analysts believe back-and-forth trading is actually a healthy way for stocks to recover, because it reflects a conservative rather than euphoric attitude among investors.

Still, it was too early to tell whether the big March advance might go the way of Wall Street's year-end rally, which was more than wiped out in January and February. Although the gains of the past three weeks have been based on early signs of improvement in the banking system and the economy, those advances are vulnerable to critical economic data due next week and first-quarter earnings reports that will begin in a few weeks.

The economic reports due next week include the March employment report on Friday. Although the report is likely to show more job losses, analysts believe the market can keep rising if there are other data showing the economy is improving or at the very least stabilizing.

"While the employment report is key," said Stuart Schweitzer, global markets strategist at JPMorgan Private Bank, "company earnings announcements will shed light on where we go from here because they will tell us how much more restraint companies may need to show in the future."

On Friday, the Commerce Department said personal spending rose 0.2 percent in February, as expected, down from a 1 percent gain in January. Personal incomes fell 0.2 percent.

Disappointing announcements sapped strength from technology companies. Tech stocks had surged Thursday and pushed the Nasdaq into positive territory for the year.

Internet powerhouse Google said it is laying off nearly 200 workers, and technology consulting and outsourcing firm Accenture lowered its forecast for the quarter and the year. Google fell $5.59 to $347.70, while Accenture dropped $4.30, or 13.5 percent, to $27.66.

Falling oil prices sapped demand for energy stocks a day after crude hit a high for the year. Investors worried that recent gains aren't sustainable amid lingering doubts about the economy.

Crude oil fell $1.96 to settle at $52.38 a barrel on the New York Mercantile Exchange. Exxon Mobil Corp. dropped $1.25 to $69.98, while Chevron Corp. fell $1.27 to $68.90.

Financial companies were mainly weak too, after President Barack Obama met with the chief executives of the nation's largest banks. Obama and Treasury Secretary Timothy Geithner are preparing to launch a partnership with private investors to buy banks' toxic assets.

Citigroup Inc. dropped 19 cents, or 6.8 percent, to $2.62, while JPMorgan Chase & Co. fell $1.70, or 5.8 percent, to $27.40.

General Motors Corp. rallied for a second day as investors remained optimistic that the government would rescue the ailing automaker. GM rose 21 cents, or 6.2 percent, to $3.62, having earlier jumped as much as 15.5 percent.

The gains followed remarks from Obama on Thursday promising to offer a new aid package to GM and Chrysler LLC in the coming days.

Mike Stanfield, chief executive of VSR Financial Services, an Overland Park, Kan.-based securities broker-dealer, has been telling investors to shift into large-cap growth stocks and energy ahead of an economic rebound. Still, he remains cautious.

"We're not encouraging anyone to go all in," he said. Stanfield is telling investors to return to a more traditional mix of stocks and bonds.

In other market action Friday, the Russell 2000 index of smaller companies fell 16.30, or 3.7 percent, to 429.00.

For every advancing stock there were about three that fell on the New York Stock Exchange. Volume came to 1.4 billion shares.

The dollar was mixed against other major currencies, while gold prices fell.

Government bonds fell. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 2.76 percent from 2.74 percent.

Overseas, Britain's FTSE 100 fell 0.8 percent, Germany's DAX index fell 1.4 percent, and France's CAC-40 fell 1.8 percent. Japan's Nikkei stock average fell 0.11 percent.