The Dow Jones industrial average lost 52.07 points, or 0.49%, to 10,558.03. The broader Standard & Poor's 500 index lost 9.44 points, or 0.76%, to 1,226.42. The tech-heavy Nasdaq composite lost 13.41 points, or 0.61%, to 2,177.91.
Looking ahead to next week, the Federal Reserve's policy-setting arm, the Federal Open Market Committee meets Tuesday. Economists are expecting the Fed to raise its target fund rate another quarter point to 3.50%. On Thursday retail sales figures for July will be released, and on Friday figures on the international trade balance for June are due out.
Companies reporting quarterly earnings next week include networking equipment maker Cisco (CSCO
) and Walt Disney (DIS
) on Tuesday, media group News Corporation (NWS
) on Wednesday, computer maker Dell (DELL
), and discount retailer Target (TGT
) on Thursday.
On Friday, the closely watched job-growth number in the July employment release came in stronger than expected. Nonfarm payrolls rose 207,000 in July, after a 166,000 increase in June (revised from the previous estimate of 146,000). The unemployment rate was unchanged at 5%, which is what economists polled by Action Economics expected, but the average hourly wage rose 0.4%, greater than the 0.2% forecast.
Action Economics said the data would put downward pressure on Treasury prices, as the increase in hourly earnings would add to fears that the Federal Reserve will keep hiking rates, "and perhaps move to a more aggressive pace."
In the energy markets, crude oil settled up 93 cents per barrel to $62.31 on the New York Mercantile Exchange. The high equalled the previous record set on Wednesday, said Action Economics, and was driven by refinery outages.
In corporate news, the Wall Street Journal reported that the Justice Department is investigating criminal allegations that DaimlerChrysler's (DCX
) Mercedes unit paid bribes in a dozen or more countries, and that senior executives knew. The newspaper said that the current probe is an escalation of a civil inquiry by the Securities and Exchange Commission that was reported last year.
Software giant Microsoft (MSFT
) announced that it had tapped B. Kevin Turner, head of retailer Wal-Mart's (WMT
) Sam's Club stores, as its chief operating officer, the company's third-ranking executive.
Auto part maker Delphi (DPH
) fell more than 14% Friday after confirming that it is in restructuring talks with its union and its former parent General Motors (GM
After the market close Thursday, media group Viacom (VIA
) CEO Sumner Redstone announced he would step down as chief executive by next year after the company splits in two. The company, which is planning to divide its cable and movie division from its broadcast and radio units, also reported second-quarter profit unchanged at $753.8 million.
Treasury prices fell Friday in the wake of the stronger-than-expected jobs data. The data on strong wage growth, in particular, seemed to be fuelling inflation fears, and drove Treasury prices down immediately after its release, according to Standard & Poor's MarketScope. The yield on the benchmark 10-year rose to 4.39% from 4.31% just before the 8:30 a.m. release.
European stock markets closed lower Friday. London's FTSE 100 index lost 0.80 points, or 0.02%, to 5,314.70, as British June industrial production fell 1.9% from the reading last year, less than expected. Barclays bank was up on an unexpected gain in first-half profit, and EasyJet rose after the company raised its full-year profit forecast.
Germany's DAX index fell 46.88 points, or 0.96%, to 4,827.18, as oil prices rose. Fresenius Medical was lower on profit-taking after a recent surge on strong quarterly profit, and Addidas-Salomon was lower after Morgan Stanley downgraded its rating to equal weight from over weight.
In Paris, the CAC 40 index lost 37.27 points, or 0.84%, to 4,421.70. Tire maker Michelin was up on strong quarterly earnings, while hotel group Accor rose on takeover rumors.
Asian markets finished mixed Wednesday. In Japan, the Nikkei index fell 116.83 points, or 0.98%, to 11,766.48, as some ruling party members said they would vote down Prime Minister Junichiro Koizumi's bill to privatize Japan Post, the world's largest savings institution.
In Hong Kong, the Hang Seng index fell 60.22 points, or 0.40%, to 15,051.32. Property groups led the decline on the back of concerns of higher interest rates.