Stocks fell Friday as declines in commodities stirred by a rebound in the dollar weighed on energy and materials shares.
The declines, in a session of relatively light volume, came despite a bigger-than-forecast rise in home resales last month and big gains for Microsoftand Amazon.comafter their earnings beat Wall Street's expectations.
The Dow Jones Industrial Average declined 109.13 points, or 1.1%, to 9972.18. It traded as high as 10109.57 during the session. American Expresssank 5.1% despite reporting earnings and revenue that beat analysts' forecasts. Microsoft tempered the declines, jumping 5.4%.
The Standard & Poor's 500 fell 13.31 points, or 1.2%, to 1079.60. Every sector declined, with basic-materials shares declined 2%.
The Nasdaq Composite Index fell 10.82 points, or 0.5%, to 2154.47 despite the gains in Microsoft and Amazon. Amazon shares hit an all-time high, ending up 27% at $118.49 after it posted strong third-quarter results that suggested it's taking market share.
For the week, the Dow was down 0.2%, breaking a streak of two weekly gains, while the S&P 500 fell 0.7% and the Nasdaq fell 0.1%. A jump on Monday had sent stocks to new 12-month highs.
The Dow Jones Transportation Average tumbled by 3.5% on concerns about railroads. Late Thursday, Burlington Northernissued a fourth-quarter forecast that signaled freight demand, a gauge of the wider economy, has yet to turn a corner. Burlington Northern shares fell 6.5%.
Analysts say the market is trying to determine whether third-quarter earnings reports, which have generally topped Wall Street expectations, justify the S&P 500's 62% rally over the past seven months.
"It's the push-pull between lots of cash looking to go into the market, and concern about how stretched this move is," said Jon Merriman, chief executive of Merriman Curhan Ford. "That's the schizophrenia you're seeing in the market."
Also weighing on sentiment was the U.S. government's plans to aggressively regulate compensation at thousands of lenders and impose steep pay cuts at seven companies that received billions in federal aid.
The dollar gained against both the euro and the yen, while oil prices dropped 0.9% to $80.50 a barrel on increasing worries that the market has outstretched the current global growth landscape. The Office for National Statistics said the U.K. economy saw a record sixth straight quarter of contraction in July through September, confounding expectations that a deep recession was nearing an end.
Friday's trading volume was relatively light, with New York Stock Exchange composite volume falling short of the daily average of about six billion shares.
"This is all short-term trading more than anything else," said Richard Campagna, chief investment officer at 300 North Capital. "The dollar is up slightly, so that's making the commodities a little weaker, and we hit some resistance on 1100 on the S&P."
Gold prices fell 0.2%. Treasury prices slid, with the 2-year note sliding 4/32 to yield 1.012% and the 10-year sliding 20/32 to yield 3.494%.
