NEW YORK: US stocks declined on Friday and were on track for a second week of losses as investors opted out of financial shares amid lingering euro zone debt worries.
Investors refocused on euro zone debt before meetings by finance officials in Brussels and as the Federal Reserve moved closer to ending a stimulus program. The sentiment also caused the euro to lose further ground against the dollar.
The S&P financial index fell 1.3 percent, although selling was fairly broad-based.
Recent heavy selling in commodities has prompted several money managers to call for a pullback in stocks' recent rally, noting that much of the stock market's latest gains have been built on commodity-related stocks.
"I think this is the first thrust in what's likely to be a correction in the stock market, but the epicenter of that correction is likely to be in what's already been correcting most severely, which is the commodity-related areas," said James Dailey, a portfolio manager at TEAM Asset Strategy Fund in Harrisburg, Pennsylvania.
What's behind the move is a weaker outlook for global industrial demand, which has caused his firm to "lighten up significantly in anticipation of new lows," and to hedge positions in areas such as industrial metals.
He sees a stock market correction of between 6 percent and 8 percent off the highs in the Dow and S&P 500.
The Dow Jones industrial average was down 93.02 points, or 0.73 percent, at 12,602.90. The Standard & Poor's 500 Index was down 9.33 points, or 0.69 percent, at 1,339.32. The Nasdaq Composite Index was down 27.87 points, or 0.97 percent, at 2,835.17.
The CBOE Volatility Index, used as an indicator of investor fear, was up 4.7 percent.
In recent weeks, leadership in the S&P 500 has shifted from cyclical sectors like energy and basic materials to sectors with more stable growth like healthcare and utilities.
In technology, Yahoo Inc shares fell 3.5 percent to $16.57 after it said the Alibaba Group restructured the ownership of Alipay, one of China's largest online payment businesses, without the knowledge of Yahoo and Softbank, two of its stakeholders.
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