Stocks bucked a trend and closed lower in the last session before the Christmas holiday on investor concerns about a slower economy.
Declines were broadly based, with technology, pharmaceutical and financial shares losing ground.
The Dow Jones Industrial Average closed lower, as did Nasdaq and the S&P 500.
Volume is expected to be low again next week, but there will be manufacturing and new home sales data to examine, as well as weekly jobless claims and oil inventories.
The drug retail sector was a bright spot, helped by strength in shares of Walgreen . The nation's largest drugstore chain by revenue reported better-than-expected first quarter profits, 25% higher than a year ago.
Traders said recent weakness in prices of commodities such as copper and a decline in the Dow Jones transportation average renewed concerns about slower growth, according to Reuters.
Dow laggards include Boeing , Dupont and JP Morgan.
Some traders felt the drop in the markets just before the end of the year is nothing to fret about.
"This is nothing significant at all," Peter Costa, Senior Managing Director with Lipari Partners, told cnbc.com. "We had a good year and a lot of this is just profit-taking, people repositioning their portfolios and saving the profits."
U.S. consumer sentiment fell in December, but the drop was less than Wall Street expected. The University of Michigan said its consumer sentiment index declined to 91.7 in December from 92.1 in November. Analysts were looking for a reading of 90.2.
The government reported that orders for durable goods rose 1.9% in November, beating economists' estimates. Durable orders plunged 8.2% in October.
Personal income rose 0.3% in November and spending increased 0.5%. However, the core PCE price index--one of the Federal Reserve's favorite inflation gauges, personal consumption expenditures excluding food and energy--was unchanged. Economists predicted a 0.2% rise in the core PCE index.
It's official - Liberty Media has agreed to swap its stake in News Corp. for the largest stake in DirecTV. News Corp. said it would exchange its 38.5% stake in the satellite television company for Liberty Media's 16.3% stake in News Corp.
Red Hat Higher
Shares of Red Hat were higher after the company posted quarterly earnings that beat the Street estimate. The largest distributor of Linux open-source software reported a profit of $29.6 billion or 14 cents a share, above the 12 cents a share analysts were expecting.
Oracle is a significant competitor, however Red Hat CEO Matt Szulick, appearing on CNBC's "Squawk Box," said his company's positive performance reflects a preference for an "open, transparent, collaborative" model rather than the closed model of older software companies.
"I think open-source software represents not just new technology, but a new and collaborative way to deliver value to large global customers," said Szulick "When you look at the results, 12,000 new customers in the quarter, 25 customers renewed, just really fantastic growth at the deferred revenue line. All of these, I think, is indicative of the young company responding to competitive challenge."
The former chief executive of Pfizer will get all of his retirement package after all. In a regulatory filing, the company says Henry McKinnell will receive a total of $199 million, which includes pension, deferred compensation and other cash and stock that was due him under his contract. McKinnell was forced into early retirement in part due to investor anger over his lucrative pension package.
Blackberry maker Research In Motion reported strong subscriber growth in the third quarter and offered revenue guidance well above analysts' expectations. Shares started the session in positive territory, but turned lower.
European Markets End Mostly Lower
London's FTSE-100 closed up slightly in a shortened holiday session, while Frankfurt's DAX and the CAC-40 in Paris declined.
Tokyo Ends on a High Note
Stocks finished stronger in Japan. Tokyo's Nikkei 225 Average closed higher as investors locked in profits on recent gainers including Sony ahead of holidays overseas.