Stocks end week down
They were pulled down by poor performances by retailers, but banks and homebuilders did well.
The market was dragged lower by a weak performance from retailers and companies sensitive to higher interest rates. Homebuilders and banks did well.
Stocks had a decent start in the first half of the week, but investors were hit hard in the last three days. Overall, the Dow retreated 2.2 percent for the week, its worst for 2013. The broader Standard & Poor's 500 index lost 2.1 percent for the week, its second-worst performance of the year.
The possibility of a cutback in the Federal Reserve's massive bond-buying program in September has roiled the bond market in the last couple of weeks, which in turn spilled over into the stock market. The yield on the benchmark U.S. 10-year Treasury note rose to 2.83 percent, the highest since July 2011. A week ago, the yield was 2.58 percent. In the bond market, yields rise as prices fall.
Shares of utilities and telecommunications companies, which typically perform poorly with higher interest rates, closed broadly lower. Comcast Corp., the nation's number-one cable-TV provider, slumped 47 cents, or about 1 percent, to $42.54.
Retailers continued their selloff. Nordstrom Inc. gave a bleak sales outlook late Thursday that echoed other retail company forecasts.
Nordstrom's stock fell $2.90, or 4.9 percent, to $56.43, the biggest decliner in the S&P 500.
"It's left us scratching our heads," said John Fox, who oversees $873 million in assets as co-manager of the FAM Value Fund. "It really forces you to ask the question: 'Is the consumer slowing down?"'
Investors have been concerned about what will happen to the stock market - and the U.S. economy - if the Fed begins winding down its $85 billion-a-month bond-buying program in September.
"Expect a correction, but a shallower correction than the one that happened in June," said Frank Davis, director of sales and trading for LEK Securities.