Wall Street retreated this week as investors took profit from last week's rally and a healthy jobs report fueled concerns that more interest rate hikes were on the way. Disappointing earnings from a number of high-profile companies including Google Inc and Amazon.com Inc also weighed on sentiment.
The Dow Jones Industrial Average fell 1.04 percent in the week to Friday, to 10,793.62, while the tech-heavy NASDAQ composite lost 1.81 percent to 2,262.58. The broader-market Standard and Poor's 500 index fell 1.53 percent to 1,264.03.
"It is a down week after some predictable profit-taking following a strong January," said Hugh Johnson, chairman of Johnson Illington Advisors.
Johnson said the market was also troubled by a number of weak earnings reports, notably from Google Inc.
Investors were expected to mark time in the upcoming week, with little macroeconomic data to digest, analysts said. Among the companies reporting results will be media giant Walt Disney and drinks maker Coca-Cola, both Dow components, and Internet equipment maker Cisco Systems, a NASDAQ heavyweight.
But a key worry for investors -- further interest rate hikes -- gained fresh momentum on Friday with the publication of data showing the jobless rate had fallen to 4.7 percent last month, its lowest level since July 2001, and 193,000 jobs had been added to the economy.
The Fed has been raising interest rates as it attempts to slow economic growth in a bid to contain inflation. The jobs report showed the economy growing at a healthy pace, but it also showed that wage inflation was picking up.
"This report is much stronger than it first appears," said Ian Shepherdson, chief US economist at High Frequency Economics.
"If [the February employment report] is broadly similar, a March 28 hike is assured," he said.
Bonds fell sharply over the past week. The yield on the 10-year US Treasury bond rose to 4.533 percent from 4.503 percent a week earlier, and that on the 30-year bond fell to 4.638 percent from 4.680 percent.