U.S. stocks fell on Friday, with the S&P 500 erasing gains after rising to an intraday record, as investors considered Ukraine ahead of the weekend.
“As the afternoon wears down, investors will start contemplating the fact that the weekend is a geopolitical wildcard,” said Art Hogan, chief market strategist at Wunderlich Securities, referring to Ukraine and Russia’s annexation of Crimea.
The standoff had the European Union inking a pact with Ukraine and widening sanctions. President Barack Obama on Thursday approved possible future penalties on Russian sectors including financial services, defense and energy.
“This is an expiration day, and that always adds some interesting volatility,” added Hogan, referring to the quarterly occurrence called quadruple witching when futures and options contracts on indexes and stocks lapse.
Tiffany shares fell after the jewelry chain gave a profit forecast below estimates; Darden Restaurants gained after the operator of Red Lobster and Olive Garden posted third-quarter results in line with its previously lowered estimates.
|DJIA||Dow Jones Industrial Average||16248.86||-53.91||-0.33%|
|S&P 500||S&P 500 Index||1853.26||-13.26||-0.71%|
|NASDAQ||Nasdaq Composite Index||4204.60||-72.19||-1.69%|
Benchmark indexes fluctuated between gains and losses in afternoon trade, before all landing in the red before the close.
After jumping 115 points, the Dow Jones Industrial Average shed 28.28 points, or 0.2 percent, to 16,302.77, with Nike leading losses that included 16 of the Dow’s 30 components. The Dow ended 1.5 percent higher for the week.
Nike shares fell after the athletic retailer tallied better-than-expected third-quarter results but its outlook worried investors.
Visa rose after a federal appeals court ruled the Federal Reserve had acted within its authority when it capped debit-card swipe fees at about 21 cents, handing retailers a setback in their long-running battle with banks over transaction costs.
After rising to an intraday record 1,884.00, the S&P 500 fell 5.49 points, or 0.3 percent, to 1,866.52, with health care the hardest hit and utilities the best performing among its 10 sectors. The S&P 500 gained 1.4 percent from the week earlier.
The Nasdaq declined 42.50 points, or 1 percent, to 4,276.79, leaving it with a weekly gain of 0.7 percent.
Shares of Gilead Sciences were among those weighing on the Nasdaq, with shares of the biotechnology company falling after Democrats on the U.S. House Energy & Commerce Committee asked for a briefing from the company on the price of its hepatitis C drug Sovaldi, which costs about $84,000 a patient.
The CBOE Volatility Index (VIX), a measure of investor uncertainty, added 3.3 percent to 15.
For every two shares falling, nearly three gained on the New York Stock Exchange, where 2 billion shares traded. Composite volume cleared 5.2 billion.
On Thursday, stocks advanced to recoup most of the prior day’s losses, after upbeat economic reports and as investors reconsidered Yellen’s remarks on Wednesday, which sparked concern about the timing of when the central bank hikes short-term interest rates, currently at record lows.
“What we’ve seen this week is every piece of economic data has been incrementally better than expected. We’ve had a major concern there was a soft patch in the economy and all the weather-related things represent pent-up demand, so we could have a better spring than expected,” said Hogan.
“Broadly speaking, the market is digesting the Fed’s decisions, in terms of (Fed Chair Janet) Yellen and her preference for guidance,” said James Liu, global market strategist at J.P. Morgan Funds.
Investors who had priced in the Fed funds rate being about 25 basis points higher at the end of 2015 are now looking “at mid-2015, so June probably,” said Liu, who added: “with the economy improving, this will be easily digested.”
In remarks released Friday, Minneapolis Fed Bank President Narayana Kocherlakota said the central bank should have vowed to keep rates near zero until unemployment falls below 5.5 percent, so long as inflation and financial stability risks are contained. Kocherlakota was the lone dissenter to the Fed’s policy decision on Wednesday.
Late Thursday, the Federal Reserve said big U.S. banks have sufficient capital to weather a dramatic economic downturn, with 29 of 30 major banks meeting the minimum bar in the central bank’s yearly check. The sole bank to fail the test, Zion Bancorp said it would resubmit a capital plan to the Fed.
—By CNBC’s Kate Gibson