NEW YORK - US SHARES opened slightly lower on Friday as the market digested strong gains over the week and mulled the latest data showing more caution by American consumers.

The Dow Jones Industrial Average dropped 28.92 points (0.32 per cent) to 9,151.77 in the first exchanges after a 189-point rally on Thursday, building on sharp gains this week.

The Nasdaq composite retreated 14.98 points (0.88 per cent) to 1,683.54 and the Standard & Poor's 500 index shed 3.80 points (0.40 per cent) to 950.29.

Market action came after data showed American consumers cut spending by a sharp 0.3 per cent in Sept in the face of an intense financial market storm.

A Commerce Department report said the drop in spending - which accounts for two-thirds of US economic activity - came even as incomes rose 0.2 per cent.

The drop in spending was the steepest since June 2004, according to officials, and sharper than the average 0.2 per cent decline expected by private economists.

The focus remained on investor sentiment as the market closes out a horrific month of Oct that has pummeled stocks worldwide.

'Investor sentiment has been on the mend for the past three days, with demand for riskier assets growing as the financial crisis recedes,' said Mr Chris Lafakis at Moody's Economy.com.

'Yet the crisis has not fully passed and sentiment has not fully recovered.' -- AFP