S&P 500 declines for third straight week as dollar resumes rally

NEW YORK -- U.S. stocks fell, sending the Standard & Poor's 500 index to its third straight weekly decline, as a dollar rally weighed on raw-material and industrial companies.

International Business Machines and United Technologies lost more than 2 percent. Halliburton, Exxon Mobil and Chevron declined as crude oil retreated amid rising supplies. Raw material companies slid 1 percent.

The S&P 500 index slipped 0.6 percent to 2,053.4. The gauge pared losses of as much as 1.2 percent as energy companies trimmed de

clines in the final half hour of trading. The Dow Jones industrial average dropped 145.91 points, or 0.8 percent, to 17,749.31. The Nasdaq composite index fell 0.4 percent. About 6.8 billion shares changed hands on U.S. exchanges, 2.1 percent below the three-month average.

"We need the dollar and oil to settle down or we're going to see more big moves," Randy Frederick, managing director of trading and derivatives at Charles Schwab, said by telephone. "A lot of this volatility we've seen recently is related to most of the data indicating that the Fed's rate hike is very likely coming in June."

The dollar advanced against the euro, rebounding from a drop on Thursday that was the most since Feb. 5. A dollar gauge against its major peers has jumped 8 percent this year, set for the biggest quarterly gain since 2008.

The U.S. currency's rise to a 12-year high versus the euro has helped drag American stocks down 3 percent since a record on March 2, amid concern earnings growth will be lower than investors project.

Consumer confidence declined in March to a four-month low as optimism about the U.S. economy was tempered by weaker income expectations and a rebound in gasoline prices.

The University of Michigan said Friday its preliminary consumer sentiment index decreased to 91.2 this month from 95.4 in February. The median projection in a Bloomberg survey of economists called for a reading of 95.5.

An earlier report showed wholesale prices in the U.S. unexpectedly declined in February for a fourth consecutive month, reflecting cheaper food and a slump in profit margins among wholesalers and retailers.

Overall, U.S. economic data have been falling short of prognosticators' expectations by the most in six years. The Bloomberg ECO U.S. Surprise Index, which measures whether data beat or miss forecasts, fell to the lowest since 2009, when the nation was in the deepest recession since the Great Depression.

All 10 main groups of the S&P 500 declined as utilities and and raw-material shares fell at least 1 percent, leading losses. IBM and United Technologies slid at least 2 percent for the worst drops in the Dow.

Miner Freeport-McMoran lost 4 percent and specialty metals producer Allegheny Technologies fell 5.8 percent to pace declines among raw-material companies. Alcoa slipped 1.7 percent.

Energy companies in the S&P 500 dropped 0.5 percent after falling as much as 1.5 percent and briefly touching a two-year low. Halliburton decreased 2 percent, while Dow components Chevron and Exxon slumped at least 0.4 percent as West Texas Intermediate crude prices fell to the lowest in six weeks.

Financial companies in the benchmark index lost 0.7 percent after rising 2.2 percent Thursday in their second-strongest advance this year. Charles Schwab slumped 2.3 percent, reversing yesterday's 1.2 percent climb. Morgan Stanley slid 2 percent after Thursday posting its best gain since June.

The Chicago Board Options Exchange volatility index gained 3.8 percent to 16, after its biggest drop in a month Thursday. The gauge, know as the VIX, rose 14 percent last week, its biggest jump in five weeks.

Harley-Davidson fell 3.4 percent to its lowest level since October after a report that the motorcycle maker is laying off 169 workers at a Kansas City, Missouri, factory.

Herbalife jumped 8.2 percent. The FBI is investigating a contractor hired by Ackman's Pershing Square Capital Management and whether false statements were made to regulators, said two people familiar with the matter.

Ackman accused Herbalife of misleading distributors, misrepresenting sales and selling a commodity product at inflated prices. His fund bet $1 billion against Herbalife's shares.