The Dow Jones Industrial Average dropped more than 160 points in intra-day trading, before settling 123.23 points lower, or 0.72 percent, at 16,960.57, weighed by a nearly 4 percent decline on Visa. Cisco, Verizon and McDonald's were among the six blue-chip gainers. The index had its biggest weekly decline in 7 weeks and has alternated between gains and losses for eight straight weeks, a pattern not seen since June 2008.
The S&P 500 closed nearly 10 points lower, or 0.48 percent, at 1,978.34, the first decline after four sessions. Consumer Discretionary was the greatest laggard, and Telecommunications and Materials the only gainers among the 10 sectors. The index traded lower for the first time in four sessions, after closing at its 27th record for the year on Thursday.
The Nasdaq ended higher for the week, but still suffered a loss of 22.5 points, or 0.50 percent, at 4,449.56. Amazon stock contributed to most of the decline.
The Russell 2000 closed lower for the third consecutive week, posting the worst 3-week drop for small-caps in more than 3 months.
The CBOE Volatility Index, widely considered the best gauge of fear in the market, rose more than 6 percent to 12.61.
For every two decliners, one gained on the New York Stock Exchange, with an exchange volume of more than 568 million and a composite volume above 2.6 billion just before market close.
Crude Oil futures for September settled at $102.09 on the New York Mercantile Exchange, while gold futures for August closed at $1,303.30, down for the second consecutive week.
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The U.S. dollar gained against other major currencies, and the benchmark 10-year note yield fell one basis point to 2.47 percent. The Euro hit its lowest level against the dollar since November.
Shares of the restaurant chain El Pollo Loco surged in the company's first day of trading on Friday, ending 60.20 percent higher at $24.03.
Baidu shares retained gains in the close at $226.50, a 10.88 percent increase, after China's biggest Internet search company beat analyst expectations with a 34.1 percent jump in quarterly net profit, boosted by mobile revenue.
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Facebook closed just under its record high touched on Thursday after the social network company posted higher-than-expected earnings earlier this week.
Starbucks closed 2 percent lower after barely beating Wall Street expectations on its earnings report late Thursday.
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Shares in music streaming service Pandora Media ended the day about 10 percent lower, after dropping as much as 13 percent in intra-day trading on lowered forecasts and a month-over-month decline in audience for June, although quarterly earnings beat expectations for the second straight time.
—By CNBC's Evelyn Cheng. Reuters contributed to this report.
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