AFTER flitting between tiny gains and losses most of yesterday, the stock market closed mostly lower, a peaceful end to the most volatile month in nearly two years.
"It's a dull Friday," said Gary Flam, a stock manager at Bel Air Investment Advisors. A bull market, he added, is "rarely a straight march up."
The Standard & Poor's 500 index ended its bumpy ride in June down 1.5 percent, the first monthly loss since October. Still, the index had its best first half of a year since 1998.
Investors seemed unsure how to react to recent statements by Federal Reserve officials about when the central bank might end its support for the economy.
Mixed economic news added to investors' uncertainty Friday. An index of consumer confidence was up but a gauge of business activity in the Chicago area plunged.
"Investors don't know what to make of the news," said John Toohey, vice president of stock investments at USAA Investment Management. "I wouldn't be surprised to see more ups and downs."
The S&P 500 stock index closed down 6.92 points, or 0.4 percent, to 1,606.28. The Dow Jones industrial average fell 114.89 points, or 0.8 percent, to 14,909.60. The Nasdaq composite index rose 1.38 points, or 0.04 percent, to 3,403.25.
Stocks have jumped around in June. By contrast, the first five months of the year were mostly calm, marked by small but steady gains as investors bought on news of higher home prices, record corporate earnings and an improving jobs market.
By May 21, the S&P 500 had climbed to a record 1,669. Fed Chairman Ben Bernanke spoke the next day, and prices began gyrating.
Investors have long known that the central bank would eventually pull back from its bond purchases, which are designed to lower interest rates and get people to borrow and spend more. Last week, Bernanke got more specific about the timing. He said the Fed could start purchasing fewer bonds later this year, and stop buying them completely by the middle of next year, if the economy continued to strengthen.
Investors dumped stocks, but then had second thoughts this week as other Fed officials stressed that the central bank wouldn't pull back on its support soon. The Dow gained 365 points over the previous three days this week. The Dow has had 16 triple-digit moves for the month, the most since September 2011.
Bonds have also been on a bumpy ride in recent weeks, mostly down.
The prospect of fewer purchases by the Fed sent investors fleeing from all sorts of bonds - municipals, US Treasury securities, corporate bonds, foreign government debt and high-yield bonds. Investors pulled a record US$23 billion from bond mutual funds in the five trading days ended Wednesday, according to Bank of America Merrill Lynch.
Bond yields, which move in the opposite direction of bond prices, have rocketed.
The yield on the 10-year Treasury note rose to 2.49 percent from 2.47 percent late Thursday. Last month, the yield was as low as 1.63 percent. Treasury yields help set borrowing costs for a large range of consumer and business loans.
It's been a rocky month in foreign markets, too. Major indexes in France, Germany and Britain have lost about 5 percent in June.
In US economic news Friday, the University of Michigan said its index of consumer sentiment dipped to 84.1 in June from 84.5 the previous month. But that was still relatively high. May's reading was the highest since July 2007.
Meanwhile, the Chicago Business Barometer sank to 51.6 from a 14-month high of 58.7 in May. That was well below the level of 55 that economists polled by FactSet were expecting.
Bill Strazzullo, chief strategist of Bell Curve Trading, is worried stock investors will sell on any signs the Fed is slowing down its economic stimulus program.
"This rally is still very much being supported by monetary easing by central banks," he said. He added, referring to Friday's quiet trading: "It's the calm before the storm."
The S&P 500 has gained 13.8 percent since the start of the year, including dividends. That is its best performance in a first half of year since 1998, when it gained 17.7 percent.
On Friday, eight of the 10 industry groups in the S&P 500 were down for the day, led by health care companies. They fell 0.9 percent.
In commodities trading, gold gained US$12.10 to US$1,223.70 an ounce. The price of crude oil fell 49 cents to US$96.56 a barrel. The dollar rose against the euro and the Japanese yen.
Among stocks making big moves:
- BlackBerry maker Research In Motion plunged US$4.02, or 28 percent, to US$10.46 after the company posted a surprise loss in the first quarter and warned of future losses despite releasing its new line of smartphones this year. The company also discontinued making new versions of its slow-selling tablet device, The Playbook.
- Accenture fell US$8.26, or 10 percent, to US$71.96. The consulting firm cut its revenue and profit outlook for its fiscal year ending in August. Revenue was hurt by lower demand in Europe as well as in its communications, media and technology division.
- Hospira rose US$2.16, or 6 percent, to US$38.31. The drug company said it had received a positive opinion from a European drug regulator for a drug to treat rheumatoid arthritis, among other illnesses. A final decision could come three months.
