NEW YORK (CNN/Money) - Stocks closed lower for the third week in a row, on uncertainty about Iraq, sober comments from Fed Chairman Alan Greenspan and a profit warning from Honeywell International Friday, as investors commemorated the one-year anniversary of the Sept. 11 terrorist attacks.

The Dow Jones industrial average fell 66.72, or 0.80 percent, to 8,312.69. The Nasdaq composite gained 11.72, or 0.92 percent, to 1,291.40. The Standard & Poor's 500 index was 2.90, or 0.33 percent, higher at 889.81.

For the week, the Dow lost 1.4 percent, the Nasdaq lost 0.3 percent and the Standard & Poor's 500 index lost 0.5 percent. But the mild percentage changes don't really tell the story of the churning and volatility along the way.

"Emotionally, there was a sense this week of people wanting to get home and be with their families. In terms of trading there was not a lot going on and the volume was really low," said Peter Costa, principal at Francis P. Maglio & Co., told CNNfn's Street Sweep. "I think you'll start to see some money coming back in when earnings get started ... and when there is some progress with the Middle East."

Fear of the U.S. war involvement and its potential impact on global oil prices has unnerved stock investors in recent weeks and came into play again this week.

Next week, quarterly profit reports are expected from Best Buy, Oracle, Bear Stearns, Morgan Stanley and Nike, and economic reports on consumer prices, industrial production, housing starts and building permits, among others, are scheduled as well.

Light volume kept stocks volatile throughout the week. A tech-fueled bounce led to a rally Monday, but a more mixed session prevailed Tuesday, as investors geared up for the one-year anniversary of Sept. 11, the date of the worst terrorist attacks in the nation's history.

On the day of the anniversary, Wednesday, stocks zig-zagged fairly dramatically, and ended up mixed, as investors took in a weak report on the economy, the Federal Reserve's "Beige Book," and some reports of airline disturbances that revived fears about the threat of terrorism.

Stocks fell Thursday on troubling comments from Alan Greenspan about the economy and President Bush about the situation in Iraq.

Friday's trade left stocks divided, with techs finding some strength from software and other gains and blue chips dipping on weak economic data and a warning from Honeywell.

The University of Michigan's preliminary reading of September consumer sentiment, which showed a steeper-than-expected decline. The index fell to 86.2 from 87.6 in August, according to a Reuters report. Economists were expecting a slight increase to 88.

In corporate news, aerospace and defense manufacturer Honeywell International (HON: down $4.78 to $23.56, Research, Estimates), a Dow component, warned late Thursday that third-quarter and full-year earnings per share will come in lower than what analysts have been expecting. The company cited the sluggish economic recovery and a delay in the anticipated second-half improvement in commercial aerospace, as airlines continue to struggle with their profitability, which in turn affects the demand for products.

The news hurt other companies that deal in aerospace and defense, including Dow components General Electric (GE: down $0.95 to $27.05, Research, Estimates), Boeing (BA: down $0.87 to $35.58, Research, Estimates), and United Technologies (UTX: down $3.10 to $58.00, Research, Estimates).

"People were surprised not so much by Honeywell's warning, but by the magnitude of the cuts they made," said Robert Norfleet, an aerospace and defense analyst at Davenport & Co.

"But in Honeywell's defense, it's not a matter of anything they are doing wrong," Norfleet added. "They are just not seeing a pickup in the economy which would then yield higher demand for the products whose parts they produce. The economy is flat. Discretionary spending by companies is down, and the weak demand for manufacturers is continuing."

Tech stocks struggled to break even on mixed forecasts and brokerage notes.

Graphics software maker Adobe Systems (ADBE: up $2.32 to $20.77, Research, Estimates) reported third-quarter earnings of 22 cents per share late Thursday, 3 cents better than expected. The company earned 28 cents per share in the same period one year earlier. The company also raised its fourth-quarter revenue and earnings-per-share guidance. The news gave a lift to Oracle (ORCL: up $0.25 to $9.73, Research, Estimates) and other software makers.

Troubled telecom gear maker Lucent Technologies (LU: down $0.39 to $1.26, Research, Estimates) warned that it will report a sharply wider fourth-quarter loss as it struggles to return to profitability. The company now expects a 45-cent per-share loss, rather than the 16 cent-per-share loss analysts have expected, and revenue that is 20-to-25 percent lower in the fourth quarter than the $2.95 billion it reported in the third quarter.

Shares of chipmaker Advanced Micro Devices (AMD: down $0.43 to $7.21, Research, Estimates) fell after the company said the launch of its "Hammer" chip, a desktop microprocessor, would be delayed. Following the news, Merrill Lynch widened its 2003 loss estimates on the company. Competitors such as Intel (INTC: up $0.33 to $16.03, Research, Estimates) gained on the news.

ESS Technology (ESST: down $3.55 to $7.68, Research, Estimates), a maker of chips for DVD players, warned late Thursday that third- and fourth-quarter earnings per share and revenue will come in sharply lower than the company's previous forecasts and what analysts are currently expecting. The company blamed slower demand and increased competition. Following the news, SoundView Technology Group downgraded the shares and cut its price target for the stock.

Construction equipment maker Caterpillar (CAT: down $1.75 to $40.64, Research, Estimates), a Dow component, declined on a dour J.P. Morgan note. The firm said Caterpillar may lower guidance either when it releases August sales data next week or when third-quarter earnings are released next month. The firm said that areas of Caterpillar's business that were pretty strong last year, such as power generation, oil and gas, and coal mining, have weakened this year. The firm is maintaining its "long-term buy" rating but says that investors may want to wait to buy it in the near term.

On an up note, retail stocks were moderately higher after the government reported that U.S. retail sales rose 0.8 percent in August after rising a revised 1.1 percent in July. Excluding volatile automobile sales, retail sales gained 0.4 percent following a rise of 0.2 percent in July. Economists surveyed by Briefing.com expected retail sales to rise 0.5 percent and retail sales ex-autos to rise 0.1 percent.

Also helping the sector, shares of Wal-Mart Stores (WMT: up $1.28 to $54.40, Research, Estimates), the world's No. 1 retailer, rose after Lehman Bros. started coverage with an "overweight" rating and a stock price target of $67, saying that it simply is a dominant global company. The news gave a lift to fellow Dow retailer Home Depot (HD: up $0.97 to $33.45, Research, Estimates).

In other economic news, the Producer Price Index, which measures wholesale inflation, was unchanged after falling 0.2 percent in July, the government said. Excluding food and energy prices, "core" PPI slipped 0.1 percent after declining 0.3 percent in July.

"It's pretty mixed today (Friday) with light volume," said Peter Green, market analyst at MKM Partners. "The warning from Honeywell is very discouraging, as is the sentiment number, but then the retail sales number was fine, so that may be giving us a little buoyancy. We're also still worrying about Iraq."

In his address to the United Nations General Assembly Thursday, President Bush tried to gain support against Iraqi President Saddam Hussein. Late Friday morning, Reuters reported that Iraq has rejected weapons inspectors, and Bush said he doubts Iraq will comply with demands that it abide by previous disarmament agreements.

Investors were also still digesting remarks made Thursday by Federal Reserve Chairman Alan Greenspan. Speaking before the House Budget Committee, Greenspan warned of higher interest rates and limited investment if Congress gives up its fiscal discipline.

Treasury prices rose, pushing the 10-year note yield down to 3.90 percent. The dollar rallied versus the yen and euro. Light crude oil futures gained 96 cents to $29.99 a barrel, while gold fell.

Market breadth was mixed in light volume. On the New York Stock Exchange, winners beat losers 9-to-7 as 1.22 billion shares traded. On the Nasdaq, decliners edged advancers 6-to-5 as 1.24 billion shares traded.