NEW YORK -- U.S. stocks fell on Friday, chalking up a third weekly loss in four, with investors on guard ahead of next week's monetary-policy decision by a key Federal Reserve committee.
"We didn't get the pullback in May when we thought we would, so it looks like June is giving us some of that," said Andrew Fitzpatrick, director of investments at Hinsdale Associates Inc.
A day after Wall Street rallied on thinking the Federal Reserve would continue record-low interest rates, investors took a cautious stance on the final session of a losing week.
The Federal Open Market Committee holds a two-day policy gathering next week, with Fed Chairman Ben Bernanke due to hold a news conference Wednesday after the FOMC decision.
Wall Street is tracking economic reports for clues as to whether the economy is strong enough to withstand the much-discussed tapering of Fed stimulus -- specifically, its $85 billion in monthly bond purchases.
"The economy is not where it needs to be for the Fed to cut off stimulus, with inflation coming in under their target and with the jobs report still not being really strong, it still leaves room for the Fed to maintain its policies," said Fitzpatrick.
On Friday, the Fed was advised to step carefully in scaling back from its monetary
easing by the International Monetary Fund, which also cut its U.S. growth outlook for next year to 2.7 percent from the 3 percent projected in April.
The Dow Jones industrial average lost 105.90 points, or 0.7 percent, to 15,070.18.
Down 1.2 percent for the week, the Dow on Friday made its fourth consecutive triple-digit move.
A day after its best session since Jan. 2, the S&P 500 index retreated 9.63 points, or 0.6 percent, to 1,626.73.
The S&P 500 finished with a 1 percent weekly drop.
The Nasdaq composite shed 21.81 points, or 0.6 percent, to 3,423.56, leaving it off 1.3 percent from last Friday's close.
Energy prices rose. Gold also gained, with futures rising $9.80 to close at $1,387.60 an ounce.
Treasury prices advanced, with the yield on the 10-year note used in determining mortgage rates and other consumer loans down to 2.13 percent.
Cable stocks were among the more active issues, with Time Warner Cable Inc. up 8.1 percent after CNBC reported it held discussions with Liberty Media Corp. about industry consolidation, including a possible union between Time Warner Cable and Charter Communications Inc., in which Liberty Media holds a large stake.
Groupon Inc. jumped almost 12 percent after the daily-deals site drew an upgrade by Deutsche Bank AG.
Smith & Wesson Holding Corp. rose 5.2 percent after the gun manufacturer reported initial earnings above expectations.
Smithfield Foods Inc.'s shares held steady after the hog producer reported a steep drop in net profit.
Reports on Friday had the preliminary June reading of the University of Michigan/Thomson Reuters consumer-sentiment gauge declining from a six-year high to 82.7 from a final May reading of 84.5.
The Labor Department reported producer prices rose 0.5 percent in May, the first increase in three months. A separate report had U.S. industrial production unchanged in May.
On Thursday, late-session gains kicked in after Wall Street Journal reporter Jon Hilsenrath, considered an influential voice on central-bank policy, said Bernanke will likely choose next week's meeting to try to soothe market fears that the Fed is headed towards the easing exit in a hurry.
"It's been a roller coaster, certainly in the last few days. I think people are comforted by thinking the Fed is not set to make any changes. There's a lot of talk, but no action. The market is still unsure, but leaning towards no action," said Fitzpatrick at Hinsdale Associates.