Bond yields rose and stocks mostly bounced back from an early slide to finish with modest losses Friday, a downbeat end on Wall Street to an otherwise milestone-setting week for the broader market.
The small decline snapped a six-day winning streak for the S&P 500, though the benchmark index still notched a weekly gain.
The S&P 500 set three straight all-time highs earlier in the week, extending the market’s solid gains in June into July. The S&P is up 19.3 per cent so far this year, reports AP.
The major indexes headed lower from the get-go Friday, a tumble that briefly knocked 230 points off the Dow Jones Industrial Average.
Investors got rattled by government data showing an unexpected burst of hiring last month. That led traders to question whether the Federal Reserve will decide to lower interest rates later this month.
The Labor Department said that employers added a robust 224,000 jobs in June.
The pickup in hiring could give the central bank pause later this month, when its policymakers are scheduled to meet and consider cutting the Fed’s benchmark interest rate.
The S&P 500 fell 5.41 points, or 0.2 per cent, to 2,990.41. The Dow dropped 43.88 points, or 0.2 per cent, to 26,922.12.
The Nasdaq composite slid 8.44 points, or 0.1 per cent, to 8,161.79. The Russell 2000 index of smaller company stocks rose 3.50 points, or 0.2 per cent, to 1,575.62.
Trading volume was light as US markets reopened following the Independence Day holiday.
Traders were betting Friday that a rate cut in late July may be less likely now.
Investors sold bonds, sending the yield in the 10-year Treasury note up to 2.04 per cent from 1.95 per cent late Wednesday, a big move.
Bond yields have fallen through much of June as investors’ expectations of a Fed rate cut increased.
The jump in yields helped boost financial stocks, which led the gainers.
Higher bond yields push up interest rates that banks charge on mortgages and other loans. Jefferies Financial Group climbed 3.4 per cent to lead all gainers in the S&P 500.
Homebuilders fell broadly as bond yields rose, setting the stage for higher mortgage rates that could put a crimp on sales. KB Home dropped 2.4 per cent.
Health care, industrial, technology and consumer staples stocks accounted for much of the selling.
Regeneron Pharmaceuticals fell 3.6 per cent, Rockwell Automation dropped 2.9 per cent, Nvidia slid 1.6 per cent and Kellogg lost 1.6 per cent.
Video game company Electronic Arts fell 4.5 per cent, the biggest losers in the S&P 500.
Major stock indexes in Europe also ended lower Friday, while energy futures prices closed broadly higher.
Benchmark crude oil rose 17 cents to settle at $57.51 a barrel. Brent crude oil, the international standard, gained 93 cents to close at $64.23 a barrel.
Wholesale gasoline rose 1 cent to $1.93 per gallon. Heating oil climbed 1 cent to $1.91 per gallon. Natural gas added 13 cents to $2.42 per 1,000 cubic feet.
Gold fell $21.00 to $1396.70 per ounce, silver fell 33 cents to $14.92 per ounce and copper fell 2 cents to $2.66 per pound.
The dollar rose to 108.58 Japanese yen from 107.78 yen on Thursday. The euro weakened to $1.1222 from $1.1285.