NEW YORK – U.S. stocks fell on Friday, chalking up a third weekly loss in four, with investors on guard ahead of next week’s monetary-policy decision by a key Federal Reserve committee.
“We didn’t get the pullback in May when we thought we would, so it looks like June is giving us some of that,” said Andrew Fitzpatrick, director of investments at Hinsdale Associates Inc.
A day after Wall Street rallied on thinking the Federal Reserve would continue record-low interest rates, investors took a cautious stance on the final session of a losing week.
The Federal Open Market Committee holds a two-day policy gathering next week, with Fed Chairman Ben Bernanke due to hold a news conference Wednesday after the FOMC decision.
Wall Street is tracking economic reports for clues as to whether the economy is strong enough to withstand the tapering of Fed stimulus – specifically, its $85 billion in monthly bond buys.
“The economy is not where it needs to be for the Fed to cut off stimulus, with inflation coming in under their target and with the jobs report still not being really strong, it still leaves room for the Fed to maintain its policies,” Fitzpatrick said.
On Friday, the Fed was advised to step carefully in scaling back from its monetary easing by the International Monetary Fund, which also cut its U.S. growth outlook for next year to 2.7 percent from the 3 percent projected in April.
The Dow Jones industrial average lost 105.90 points, or 0.7 percent, to 15,070.18.
Down 1.2 percent for the week, the Dow on Friday made its fourth consecutive triple-digit move.
A day after its best session since Jan. 2, the S&P 500 index retreated 9.63 points, or 0.6 percent, to 1,626.73.
The S&P 500 dropped 1 percent this week.
The Nasdaq shed 21.81 points, or 0.6 percent, to 3,423.56, leaving it off 1.3 percent from last Friday.
Energy prices rose. Gold also gained, with futures rising $9.80 to close at $1,387.60 an ounce.
Treasury prices advanced, with the yield on the 10-year note used in determining consumer loans down to 2.13 percent.