* Financials drop after disappointing Citi, Wells results
* Nice attack weighs on travel and leisure stocks
* U.S. June retail sales up more than expected
* Indexes down: Dow 0.06 pct, S&P 0.23 pct, Nasdaq 0.21 pct (Updates to early afternoon)
By Yashaswini Swamynathan
July 15 (Reuters) - A rally that pushed the S&P 500 to record highs every day this week ran out of steam on Friday, with financials leading Wall Street lower after disappointing results from big banks.
An attack in Nice, France that killed at least 84 people weighed on sentiment and dragged down travel and leisure companies.
Results from Citigroup and Wells Fargo failed to match up to the expectation set by JPMorgan's strong numbers on Thursday.
Citi's second-quarter profit dropped 14 percent, but was less than expected, while Wells Fargo's profit fell in line with expectations.
Still Citi shares were off 0.8 percent, while Wells Fargo's dropped 3 percent and was the biggest drag on the S&P 500.
The financial index fell 0.54 percent, making it the top loser among the 10 major S&P sectors for the day and the only sector in the red for the year.
Only the materials sector was higher for the session after eking out a 0.2 percent gain.
However, in a boost to the market, data showed U.S. retail sales rose more than expected in June, reinforcing views that economic growth picked up in the second quarter.
"Over the last week or so we've gotten stronger-than-expected data across the board," said Dan Mulholland, head of Treasury trading at Credit Agricole in New York. "It's weighing on the market now that the flight-to-quality trade fades."
At 12:20 p.m. ET (1620 GMT), the Dow Jones Industrial Average was down 10.7 points, or 0.06 percent, at 18,495.71.
The S&P 500 was down 5.07 points, or 0.23 percent, at 2,158.68.
The Nasdaq Composite was down 10.58 points, or 0.21 percent, at 5,023.47.
The S&P 500 has risen about 3 percent, while the Dow has risen roughly 3.3 percent since July 7, a day before strong U.S. jobs data kicked off a broad rally.
Even if the indexes close lower for the day, they will still post their third straight week of gains.
Following news of the attack in Nice, shares of travel operators and airlines dropped on fears about travel to Europe. Priceline fell 1.5 percent to $1326.16, while Delta Air Lines fell 2 percent.
Herbalife jumped 13 percent to $67.13 after the weight-loss products maker agreed to pay the FTC $200 million to avoid being classified a pyramid scheme.
Advancing issues outnumbered decliners on the NYSE by 1,501 to 1,389. On the Nasdaq, 1,372 issues rose and 1,318 fell.
The S&P 500 index showed 25 new 52-week highs and no new lows, while the Nasdaq recorded 56 new highs and 13 new lows. (Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Savio D'Souza)