US stocks closed the week lower despite more upbeat economic data that signals an economic recovery is on track.

All the major indices closed lower with the Dow Jones Industrial average off 47 points to 9,809, the Nasdaq fell 5 points to 1,970 while the S&P declined 4 points to 1,053.

The US has recently digested surprisingly strong data such as GDP coming in at 7.2% while the unemployment rate fell to 6% when expectations were that it would remain at 6.1%.

Elsewhere Japanese stocks declined fell after investors were surprised its Prime Minister’s majority was reduced and concern quickly grew that bank reforms put in place by Japan's Prime Minister Junichiro Koizumi and his Liberal Democratic party would be diluted.

While Koizumi said no changes will be made in his cabinet and he would progress further with bank reforms, worries about the future for banking reforms could be felt through the markets.

Meanwhile economic news cheered sentiment as a report showed that China's industrial production increased last month, at the quickest rate in nearly 10 months.