Stocks closed out a volatile week on Wall Street broadly in the red Friday, led lower by banks, as investors digested a batch of mixed economic reports and remained on edge as concerns lingered over whether central banks will pare back their stimulus programs.
"Markets are more fragile now, whereas they had been bulletproof by the bulls for the last six months," said Joe Saluzzi, co-manager of trading at Themis Trading. "Unfortunately, the only thing that everyone cares about is what the Fed's doing and that's troubling, when we should be looking at economic data, fundamentals and corporate profits…There are still warning signs being flagged right now and people are getting concerned."
The Dow Jones Industrial Average fell 105.90 points to close at 15,070.18, dragged by DuPont and American Express. The blue-chip index logged its fourth triple-digit move in a row.
The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, ended near 17.
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For the week, the Dow dropped 1.17 percent, the S&P 500 slumped 1.01 percent, and the Nasdaq tumbled 1.32 percent. American Express was the worst weekly performer on the Dow, while Pfizer was the biggest gainer.
Most key S&P sectors ended in the red for the week, dragged by financials and energy, while telecoms bucked the downward trend.
"No matter what's happening with the Fed, investors realize that we're living on borrowed time and at some point, the stimulus has to be pulled back," said Jack Ablin, chief investment officer at Harris Private Bank. "With the threat of losing monetary stimulus, people are searching for fundamental value, which we've lost the connection since March. So we may see a little downside risk, but I don't view this as more than a correction."
Investors will closely watch on the Federal Reserve's policy-setting meeting next week for comments and clues into the central bank's plans for paring back some of its stimulus efforts.
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Japan's Nikkei rebounded 2 percent, after the Japanese government gave the green light to measures to boost economic growth and Finance Minister Taro Aso played down recent declines in stock prices. However, currency moves remained a concern, with the dollar-yen moving in and out of the 95-handle in choppy trade.
Adding to woes, the IMF said while underlying fundamentals in the U.S. are gradually improving, the economy is still being restrained by government spending cuts and tax increases. The IMF revised its U.S. growth outlook for 2014 don to 2.7 percent, while maintaining the 2013 guidance at 1.9 percent.
On the economic front, consumer sentiment retreated to 82.7 in June after hitting its highest in nearly six years in May, according to the Thomson Reuters/University of Michigan's preliminary reading.
Producer prices rose more than expected in May as gasoline prices rebounded, with the producer price index gaining 0.5 percent. And industrial production was unchanged in May, according to the Federal Reserve.
Current account deficit widened in the first quarter to $106.1 billion, according to the Commerce Department, falling from a downwardly revised $102.3 billion in the fourth quarter. Economists polled by Reuters expected a reading of $109.7 billion.
Apple closed below its 50-day moving average of $434.76 after trading on either side of the level all week.
Smith & Wesson rallied after the firearms manufacturer lifted its outlook for the fourth quarter and authorized a $100 million share repurchase program.
Groupon surged more than 10 percent after Deutsche Bank raised its rating on the daily-deal website to "buy" from "hold."
Walter Energy plunged more than 15 percent before being temporarily halted after the coal miner pulled a planned $1.55 billion credit refinancing, citing market conditions, according to a Reuters Loan Pricing report.
—By CNBC's JeeYeon Park (Follow JeeYeon on Twitter: @JeeYeonParkCNBC)
On Tap Next Week:
MONDAY: Empire state mfg survey, Treasury int'l capital, housing market index, G8 mtg, credit card default rates
TUESDAY: Consumer price index, housing starts, FOMC mtg begins; Earnings from Adobe Systems, La-Z-Boy
WEDNESDAY: MBA mortgage applications, oil inventories, FOMC mtg announcement & forecasts, Bernanke press conference; Earnings from FedEx, Jabil Circuit, Red Hat
THURSDAY: Jobless claims, PMI manufacturing index, existing home sales, Philadelphia Fed survey, leading indicators, natural gas inventories, Fed balance sheet/money supply, Eurogroup finance ministers meet, Best Buy shareholder mtg; Earnings from Kroger, Rite Aid, Oracle
FRIDAY: Quadruple witching; Earnings from CarMax
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