While they were able to cut their losses in the final stages of the day, the major U.S. equity indices posted solid declines on Friday. Stocks were dragged down by a warning from package-delivery giant FedEx and some soft data about the consumer.
With the slide, the major averages added to losses recorded earlier in the week, as Wall Street notched its fourth down week out of the last five.
The Dow Jones retreated 139.40 points to close at 30,822.42, while the S&P 500 dipped 28.02 points to end at 3,873.33. The Nasdaq notched a finishing level of 11,448.40, falling 103.95 on the day.
Nine of 11 S&P sectors finished the session in the red. This included greater-than-2% slides in Energy and Industrials. Consumer Staples and Real Estate ended fractionally higher.
FedEx pulling guidance as it sounded the alarm on macro weakness raised worries about overall economic growth and contributed significantly to early selling. Meanwhile, the University of Michigan released its preliminary measure of September consumer sentiment, with the figure coming in short of expectations.
Shares plunged earlier in the week following the announcement of inflation data that showed a hotter-than-expected reading for core consumer prices. The data suggested that the Federal Reserve will need to remain hawkish to squelch inflation pressures, leading to a downdraft on Wall Street.
With the Fed's policy meeting coming up next week, the market is pricing in a 16% chance that the central bank will raise its key rate by a full 100 basis points. Meanwhile, current trading suggests an 84% chance that the Fed will stick with another increase of 75 basis points.
On Thursday, bulls defended the important S&P support level of 3,900 again. They were unable to hold that level during Friday's action, raising concerns that the gates have been opened for further drawdowns, especially in the traditionally weak second half of September. The S&P 500 last closed below 3,900 in mid-July.
Following sharp jumps in yield earlier this week, Friday's action saw little movement. The 10-year Treasury yield (US10Y) slipped about one basis point at 3.45% and the 2-year yield (US2Y) also dipped one basis point to 3.86%. Looking at action in the 30-year Treasury, the 2s30s curve reached its widest inversion since 2000, according to Deutsche Bank.
Looking closer at the University of Michigan's consumer sentiment index, the figure rose to 59.5 for its preliminary September reading. This was up from a prior reading of 58.2, but the number was below the estimates of 60 that economists had predicted.
Among other active issues, GE ended lower after it highlighted supply chain pressures.