Stocks sag at the close; January finishes on a weak note

The U.S. stock market capped a rough month Friday, delivering its third loss in five days and extending its declines for the year.

All told, the Standard & Poor’s 500 index fell 3 percent in January, its worst monthly performance in a year. While the U.S. economy continued to show signs of strength, energy companies suffered from a sharp drop in oil prices and some big multinational companies saw their earnings dinged by a stronger dollar.

On Friday, investors also weighed the consequences of a slowdown in U.S. economic growth and how further strength in the dollar could dent corporate profits.

“The real issue still is the confusion, the uncertainty around the speed of decline in oil prices and what that means, and the rise in the dollar and what that means for earnings,” said Bob Doll, chief equity strategist at Nuveen Asset Management.

Before the U.S. market opened, the government said that the economy grew 2.6 percent in the last quarter of 2014, as weaker government and business spending held growth back. The decline was unexpected and down from a gain of 4.6 percent in the second quarter and 5 percent in the third quarter.

But others news signaled the steady health of the U.S. economy. Consumer spending surged in the final three months of 2014. The Labor Department reported that wages and benefits rose last year by 2.2 percent, the biggest calendar-year increase since 2008.

Investors also sifted through the latest batch of corporate earnings news, and the results were mixed.

Amazon.com and Visa reported strong results late Thursday. Amazon jumped 13.7 percent, while Visa rose 2.8 percent.

Several companies didn’t fare as well, including Ugg footwear maker Deckers Outdoor and the parent of Hawaiian Airlines, which offered discouraging outlooks.

Nine of the 10 sectors in the S&P 500 fell, with utilities declining the most.

The one sector that rose was energy. Benchmark U.S. crude rose $3.71 to close at $48.24 a barrel in New York. The price rose on expectations of lower supplies as the number of working drilling rigs continued to fall, according to a closely watched industry count. Concerns over an attack on oil-rich Kirkuk, Iraq, by Islamic insurgents also spurred oil buying and higher prices.