Investing.com – Wall Street took risk off the table on Friday ahead key events, despite a better than expected read of the American consumer and while investors also opted to take profits in crude.
At 15:00GMT or 11:00AM ET, the Dow 30 retreated 76 points, or 0.42%, the S&P 500 fell 14 points, or 0.64%, while the tech-heavy NASDAQ Composite lost 51 points, or 1.03%.
Next week, both the Federal Reserve (Fed) and the Bank of Japan (BoJ) will announce monetary policy decisions, with the U.K. referendum on membership in the European Union (EU) fast approaching the following week.
In the Fed’s case, markets and experts expect no move at the June meeting.
Fed fund futures don’t discount a rate hike until the December meeting while most experts were placing their bets on either July or September.
With those calendar events ahead, investors chose instead to poor into bonds on Friday, pushing 10-year yields to record lows. The Germany 10-Year hit an intraday low of 0.018%, the UK 10-Year at 1.228%, and Japan 10-Year hit bottom at -0.152%.
Some experts were speculating that Germany could follow Japan’s path into negative yield territory wherein investors actually pay the government to lend it money.
However, bond guru Bill Gross from Janus Capital warned that global yields were the lowest in 500 years of recorded history with $10 trillion of negative rate bonds.
“This is a supernova that will explode one day,” he said.
The most relevant data out on Friday was the University of Michigan’s consumer sentiment for June that slipped less than expected, with the current conditions gauge staging an unexpected rise and consumer expectations reading remaining in healthy territory.
Also on Friday’s economic docket, May’s Federal budget will be released at 18:00GMT, or 14:00ET.
Meanwhile, traders also took profit in crude on Friday.
A stronger dollar also weighed on oil prices on, pulling black gold from an 11-month high, despite continued supply disruptions and evidence of high demand.
Investors were also waiting for the U.S. oil drilling rig count from Baker Hughes, out later in the session.
U.S. crude futures lost 1.68 % to $49.71 by 15:02GMT, or 11:02AM ET, while Brent oil traded down 1.77% to $51.03.
In company news, H&R Block (NYSE:HRB) jumped almost 12% after reporting better-than-expected earnings and upping its dividend 10%.
To the contrary, Mattress Firm Holding Corp (NASDAQ:MFRM) tumbled almost 15% after reporting a wider-than-expected loss and giving weak guidance.
Urban Outfitters Inc (NASDAQ:URBN) fell more than 6% after it surprised with a forecast for comparable sales to fall.
In M&A news, Merck (NYSE:MRK) agreed to buy Afferent Pharmaceuticals in a deal that included an upfront payment of $500 million and milestones up to $750 million.