* Trading expected to be light ahead of holiday
* Indexes on track for fourth straight week of gains
* Chicago PMI, consumer sentiment both top forecasts
* Indexes down: Dow 0.2 pct, S&P 0.1 pct, Nasdaq 0.1 pct (Updates to market open, adds economic data)
NEW YORK, Aug 29 (Reuters) - U.S. stocks were slightly lower on Friday, with investors finding few reasons to extend a long-running rally, even as the latest economic data joined the trend of better-than-expected reports on the economy.
A note of caution entered the market as Britain raised its international terrorism threat level to the second highest level in response to possible attacks being planned in Syria and Iraq. Still, major U.S. indexes remained on track for their fourth straight week of gains.
Stocks have been strong of late, with investors taking any opportunity to buy on dips. However, this week's trading volume has been among the lightest of the year, with action especially muted on Friday, ahead of the Labor Day holiday in the United States for which markets will be closed on Monday.
"Typically after the market goes up this much this quickly, you'd expect some kind of pullback, but we've become conditioned to buy on dips. That's almost ingrained in the market," said Quincy Krosby, market strategist at Prudential Financial in Newark, New Jersey.
The Britain threat level "doesn't sound good, but unless there's definite news that's worse than things we've already seen recently, the market should be able to process it and move on," Krosby said.
In the latest economic data, the pace of business activity in the U.S. Midwest rebounded more than expected in August, signaling a pickup in that region's economy. Separately, U.S. consumer sentiment rose more than expected, according to the final August reading from the Thomson Reuters/University of Michigan Surveys of Consumers.
The Dow Jones industrial average fell 40.05 points or 0.23 percent, to 17,039.52, the S&P 500 lost 2.03 points or 0.1 percent, to 1,994.71 and the Nasdaq Composite dropped 3.75 points or 0.08 percent, to 4,553.95.
For the week, the Dow is up 0.2 percent, the S&P is up 0.3 percent and the Nasdaq is up 0.4 percent, the fourth straight week of gains for all three. For the month of August, the Dow is up 2.9 percent, S&P is up 3.3 percent and the Nasdaq is up 4.3 percent. Both the Dow and S&P have climbed in six of the past seven months.
U.S. shares of AstraZeneca rose 1.9 percent to $75.68 on news the company had moved its immuno-oncology medicine MEDI-4736 into a mid-stage study in colorectal cancer.
Splunk Inc jumped 15 percent to $51.89 a day after posting strong revenue growth and raising its full-year sales outlook. (Editing by Chizu Nomiyama and Meredith Mazzilli)