U.S. stocks trimmed their gains Friday afternoon, with the S&P 500 down for a second week in three, as investors positioned for the end of the quarter on Monday.
"The last two trading days of the quarter, people are looking to take some profit. It's a similar pattern to what we've seen in some of these momentum stocks the last couple of days. The market is telling us you should expect more volatility today and Monday. People are trying to figure out which sectors to be in the next quarter, and what things do I need to be lightening up on," said JJ Kinahan, chief strategist at TD Ameritrade.
"When the market is trading in such a tight range, and the S&P 500 has been in a 40-point range for six weeks, people get trigger happy," Kinahan said.
"It has been a range-bound start for the year, 1,840 to 1,880 is the range we've been in for a while. But that makes sense, given the economic economic data that has come out, which has been mixed," said Jerry Villella, an investment specialist at JP Morgan Private Bank.
Data on Thursday had weekly jobless claims falling, indicating "200,000-plus payroll jobs going forward," said Villella of the monthly nonfarm payrolls report, with the March data coming next Friday.
If that trend persists, "we could see a five percent unemployment rate by mid-to-late 2015," he added.
Wall Street had rallied, with the Dow Jones Industrial Average jumping 150 points, on data that had U.S. consumer spending rising and signals from Europe and China prompted thoughts of stimulus from overseas.
"We've seen a bunch of days this week when the market opens up a lot in the morning and then doesn't follow through. Plus, with two days left in the quarter, I'm sure there is a lot of noise related to that. It could be another typical buy-on-the-dip attempt, we'll see by day's end," said Peter Boockvar, chief market analyst at the Lindsey Group.
Shares of Tesla Motors jumped after the National Highway Traffic Safety Administration said it had closed its investigation into fire accidents of the electric-car maker's Model S vehicles, but the agency added its move did not mean it had found a safety-related defect did not exist. General Motors halted sales of 1.4 liter Chevy Cruze models on Friday, but no reason was given. Shares of the car manufacturer climbed.
J.P. Morgan on Friday revised its estimate of real annualized GDP growth in the first quarter from 2 percent to 1.5 percent, while leaving its projection for the second quarter unchanged at 2.5 percent.
"The durable goods report this week was surprisingly weak," said Villella of one of the drivers behind his bank's downward revision. Still, "domestic growth for the year will be 2.5 percent and global economic growth will be about 3.5 percent," he said of J.P. Morgan's 2014 outlook.
The year will be "much more volatile than last year, when we had remarkably low volatility. The average peak to trough decline is typically 14 to 15 percent, we didn't see it last year. Seven percent to 9 percent equity returns are what we expect this year," Villella added.