U.S. stocks closed lower on Friday, with energy falling more than 1 percent, as oil prices fell sharply while investors digested key manufacturing data, following two strong sessions.
"You never know what's going to happen with these OPEC meetings," said Robert Pavlik, chief market strategist at Boston Private Wealth. "You have Saudi Arabia offering a cut, but for that to happen Iran would have to agree to a [production cap]."
U.S. crude prices extended losses in late-morning trade and settled 3.97 percent lower at $44.48 per barrel after Bloomberg reported Saudi Arabia doesn't see an output deal being reached at Monday's meeting in Algeria.
"I'm not buying into any OPEC freeze, but we still think oil is going to trend up," said John Conlon, chief investment officer at People's United Wealth Management.
"The market is consolidating these strong gains following the Fed," said Quincy Krosby, market strategist at Prudential Financial. "I think the market is going to focus on oil prices after the Saudi Arabia report. Oil could be another driver in the market."
WTI intradaySource: FactSet
The S&P 500 fell 0.6 percent, with energy leading decliners. The real estate sector, which began trading earlier this week, rose approximately 0.4 percent Friday and led all 11 sectors for the week.
"The S&P futures met resistance yesterday after gapping up on improved short-term momentum. We expect resistance to be surmounted after a brief pause refreshes the intraday uptrend," said Katie Stockton, chief technical strategist at BTIG, in a note to clients.
The Nasdaq composite dropped 0.55 percent as shares of Apple fell 1.67 percent after a report from GfK supposedly raised concerns about the latest iPhone's sales. The three major indexes still posted weekly gains of around 1 percent, but snapped a three-day winning streak.
The September read on the Markit Manufacturing Flash PMI came in at 51.4, below the August read of 52.0. IHS Markit, the firm that released the data, said that the September number marked seven years of continuous growth in manufacturing, but that the "headline index was below the average seen over this period (54.0) and remained close to the post-crisis low recorded in May (50.7)."
"After falling into contraction in August as measured by the ISM survey, the September data looks no better. The NY and Philly manufacturing indices seen last week imply another below 50 print and this Markit report reflects relatively stagnant activity," said Peter Boockvar, chief market analyst at The Lindsey Group.