U.S. stocks retreated in the week ending Oct. 5 as investors fretted over the rise in bond yields while digesting a batch of economic data.
All three major indices reported negative results, with the Dow, the S&P 500 and the Nasdaq decreasing 0.04 percent, 0.97 percent and 3.20 percent, respectively.
The market experienced great fluctuations on Friday. At its lows of the day, the Dow fell as much as 325.67 points. The S&P 500 broke below its 50-day moving average for the first time since July 5 before snapping back above the closely watched technical level. The Nasdaq closed as much as 1.2 percent lower.
For the week, the tech-heavy Nasdaq suffered its biggest weekly drop since the week of March 23. It plunged 6.5 percent that week.
The U.S. Treasury bonds become the focus this week, as investors fretted over the rise in bond yields. The 10-year note yield rose to 3.23 percent and hit a fresh 2011 high on Friday.
The bond rates surge started on Wednesday, boosted by strong economic data.
U.S. private sector employment increased by 230,000 jobs from August to September, according to research institute ADP's National Employment Report on Wednesday. The reading was well above the market expectations of 185,000 and the August revised rate of 168,000.
Meanwhile, recent comments from top Federal Reserve officials also stoked yields higher.
Fed Chair Jerome Powell said on Wednesday that the U.S. central bank had a long way to go before interest rates hit neutral, indicating that more hikes could be on the horizon.
Strong data and commentary from Fed officials can be bullish for equities, but that comes with the side effect of having concerns on more inflation and interest-rate increases, which in turn is a negative for equities, experts noted.
The concerns over rate hikes seemed easily outweighing the trade optimism generated from the news that the United States, Canada and Mexico have reached a new free trade deal to replace the North American Free Trade Agreement (NAFTA) earlier the week.
Wall street also paid close attention to a slew of economic data.
The unemployment rate declined to 3.7 percent in September, and total nonfarm payroll employment increased by 134,000, the U.S. Department of Labor said on Friday. However, the figure was well below the expected gain of 185,000.
Job gains occurred in professional and business services, in health care, and in transportation and warehousing, said the department.
In September, average hourly earnings for all employees on private nonfarm payrolls rose by 8 cents to 27.24 U.S. dollars. Over the year, average hourly earnings increased by 73 cents, or 2.8 percent.
Meanwhile, in the week ending Sept. 29, U.S. initial jobless claims registered 207,000, a decrease of 8,000 from the previous week's revised level, the Department of Labor reported on Thursday.
On other economic data, the U.S. Institute for Supply Management (ISM) reported on Monday that the country's Manufacturing Purchasing Managers' Index (PMI) registered 59.8 in September, a decrease of 1.5 from the August rate. The reading missed market consensus.
The ISM non-manufacturing index rose to 61.6 in September from the August reading of 58.5, beating market forecasts.
