NEW YORK (CNN/Money) - U.S. stocks closed Friday little changed, in a fitting end to a trying second quarter that saw the major indexes register double-digit declines, as investors took in increased worries about corporate governance and global warfare.

The Nasdaq composite added 5.75 to 1,464.95 and gained 1.6 percent for the week. The Dow Jones industrial average fell 26.66 to end the day at 9,243.26 and closed the week out almost unchanged. The Standard & Poor's 500 index lost 0.82 to close at 989.82 and finished the week almost unchanged.

Major indexes were volatile Friday for reasons beyond specific stock stories. Friday marked the last trading day of the second quarter, which ends Sunday, June 30.

For the second quarter, the Dow lost 11.2 percent, the 10th worst second quarter ever, while the Nasdaq lost 21.4 percent, its worst second quarter ever, and the Standard & Poor's 500 lost 13.5 percent, its third worst second quarter ever, according to Ned Davis Research.

"It's ugly out there, but I don't think its going to get much worse going forward," Scott Wren, equity strategist, A.G. Edwards, told CNNfn's Street Sweep.

Friday was also volatile because it was the second day of the rebalancing of the Russell 2000, an index of the largest small-cap stocks

"There's incredible volatility at the end of a quarter and a lot of window dressing going on," said Peter Green, market analyst at MKM Partners.

After days of declines, telecom stocks bounced higher, with Corning (GLW: up $0.40 to $3.55, Research, Estimates) and Juniper Networks (JNPR: up $0.20 to $5.65, Research, Estimates) trading up. Telecom-equipment maker Nortel Networks (NT: up $0.05 to $1.45, Research, Estimates) also benefited from an upgrade by Dresdner Kleinwort Wasserstein.

Chip stocks continued to rise after Thursday's Lehman Bros. upgrade of the sector, including Conexant Systems (CNXT: up $0.15 to $1.62, Research, Estimates). Biotech also boosted the Nasdaq after USB Piper Jaffray raised its 2002 earnings-per-share estimate and price target on Cephalon (CEPH: up $0.85 to $45.20, Research, Estimates), saying that sales of the company's Actiq pain treatment seem to be growing more quickly than expected.

But weakness in companies such as Procter & Gamble (PG: down $2.94 to $89.30, Research, Estimates) and 3M (MMM: down $2.17 to $123.00, Research, Estimates) pushed the Dow to a lower close.

In the latest chapter of Wall Street's crisis of confidence, Xerox (XRX: down $1.03 to $6.97, Research, Estimates) said Friday that an audit revealed it had improperly booked at least $2 billion in revenue over the past five years. The Securities and Exchange Commission had settled a case with Xerox in April over the improper accounting of $3 billion between the years of 1997 and 2000.

The news comes just three days after the disclosure that telecom services company WorldCom (WCOME: Research, Estimates) had improperly recorded almost $4 billion in revenue, in what may be the largest accounting fraud in corporate history.

Friday's corporate news overshadowed the morning's mixed economic news.

The University of Michigan's revision of its June consumer confidence reading showed a surprise rise to 92.4 from the initial reading of 90.8. However, the revision still is below May's 96.9 reading.

In addition, a key regional measure of manufacturing activity, the Chicago purchasing managers' index, showed a reading of 58.2 in June, just above the 58 expected and down from 60.8 in May. However, any reading over 50 still indicates expansion in the sector.

A report issued in pre-hours trade showed that while income has grown, the pace of spending has slowed a little. Personal income rose 0.3 percent in May after rising 0.2 percent in April, in line with expectations, the Commerce Department said. But personal spending fell 0.1 percent in May after rising 0.6 percent in April. Economists surveyed by Briefing.com had expected spending to be unchanged.

Treasury prices were a little higher, pushing the yield on the 10-year note down to 4.83 percent.

European bourses rose, while Asian markets closed higher. The dollar was little changed versus the euro and the yen. Light crude oil futures fell 8 cents to $26.86 a barrel. Gold fell $2.70 to $316.90 an ounce.

Market breadth was positive. On the New York Stock Exchange, winners beat losers 2-to-1 as 2.06 billion shares traded. On the Nasdaq, advancers topped decliners by almost 3-to-2 as 1.93 billion shares changed hands.