NEW YORK — U.S. stocks faltered Friday, with the nerves of investors frayed and their expectations reduced for next week’s Federal Reserve meeting, which already weighed in with an emergency rate cut last week.
Despite the drop, the Dow Jones industrial average and S&P 500 Index eked out slight gains for the week — the Dow gaining 0.9 percent and the S&P advancing 0.4 percent. The Nasdaq Composite Index finished the week with a drop of 0.6 percent.
The market had been anticipating another 50 basis-point reduction in the Fed’s target rate at the two-day meeting that starts Tuesday.
“The consensus is now 25; or the 75 basis points could have been an early jump, and they won’t cut anything,” said Owen Fitzpatrick, head of the U.S. equity group at Deutsche Bank.
“We still have fears of what will happen next week,” said Art Hogan, chief market strategist at Jefferies & Co. “This market is groping for a bottom.” After earlier climbing more than 100 points, the Dow average ended 171.44 points, or 1.4 percent, lower at 12,207.17.
Of the Dow’s 30 components, 26 finished in the red, led by Intel Corp., down 3.6 percent.
Drug manufacturer Merck & Co. also fell 3.6 percent.
Merck and Schering-Plough Corp. defended their clinical trials of a popular cholesterol-lowering drug Vytorin in a statement.
Schering-Plough shares also slid, down 5.7 percent.
The S&P declined 21.46 points, or 1.6 percent, to 1,330.61. The Nasdaq dropped 34.72 points, or 1.5 percent, to 2,326.20.
“There are still general concerns that the financial system hasn’t quite resolved issues around the write-offs; we are seeing this on the auto and credit-card sides,” said Fitzpatrick, of Deutsche Bank.
On the New York Mercantile Exchange, gold futures soared to a record high at $924.30 in electronic trading, with the benchmark contract ending up $4.90 at $910.70.
In energy trading, crude futures rose $1.30 to end at $90.71 a barrel, on hopes that the fiscal-stimulus package announced Thursday will lift the U.S. economy.
Volume on the New York Stock Exchange came to nearly 1.9 billion shares, and declining stocks moved past those advancing by a ratio of nearly 9-to-7.
On the Nasdaq, more than 2.6 billion shares changed hands, with decliners topping advancers, also by a 9-7 ratio.
The equities market had pared early gains amid lots of talk and one report involving terminations at Goldman Sachs Group. The investment firm countered by saying that it was reviewing the bottom 5 percent of performers in its global workforce of about 30,000 and that it was still actively recruiting staff.
Early gains came after a trio of blue chips — Honeywell International Inc., Microsoft Corp. and Caterpillar Inc. — reported results that beat analysts’ expectations. But investors remained cautious about the overall economy.
