* FOMC meets next week, timing of stimulus pullback in focus
* U.S. consumer sentiment index declines in June
* JPMorgan stock falls, private equity unit to become
* Dow off 0.7 pct, S&P 500 and Nasdaq down 0.6 pct
By Rodrigo Campos
NEW YORK, June 14 U.S. stocks fell on Friday on
low volume to end their third negative week in four on lingering
concern over whether the world's central banks will soon start
to trim their stimulus programs.
Uncertainty about the longevity of loose monetary policy
around the world has caused volatility to jump lately. Nerves
were frayed some more earlier in the week when the Bank of Japan
decided to hold policy steady.
Attention is now focused on the Federal Reserve's
policy-setting meeting and press conference next week. Chairman
Ben Bernanke's congressional statement on May 22 raised concerns
that the Fed could soon begin to cool its stimulus efforts.
"Bernanke is going to try to soothe the market and maintain
his position he's not tightening soon," said Quincy Krosby,
market strategist at Prudential Financial in Newark, New Jersey.
"The market wants to see the timetable for the tapering, and
I doubt they're going to get that."
Bernanke "has become the market whisperer," she said. "He
knows tapering is necessary, but he's learning the market isn't
going to wait for the Fed to act."
The unwinding of trades linked to central bank support has
recently strengthened correlations between asset classes.
The 200-day correlation between the S&P 500 and the Japanese
currency stands at minus 0.91, near its strongest inverse
correlation in more than four years. Bets against the yen,
cemented on expectations that Tokyo will keep accommodative
monetary policy in place, have been used to finance long
positions in Wall Street equities.
The U.S. dollar extended losses against the yen on Friday to
fall more than 3 percent for the week, its largest such drop
since July 2009.
The Dow Jones industrial average fell 105.90 points
or 0.70 percent, to close at 15,070.18. The S&P 500
slipped 9.63 points or 0.59 percent, to finish at 1,626.73. The
Nasdaq Composite dropped 21.81 points or 0.63 percent,
to end at 3,423.56.
For the week, the Dow fell 1.2 percent, the S&P 500 slid 1
percent and the Nasdaq lost 1.3 percent.
The Dow swung 161 points throughout Friday's session. Its
14-day intraday average range is now 193 points - the highest
since December 2011.
The CBOE Volatility Index, or VIX, rose 4.5 percent
to end Friday's session at 17.15. The VIX is Wall Street's
favorite measure of investor anxiety.
Analysts say the market's volatility will continue as
traders try to anticipate the Fed's next move.
Financial stocks led the market's decline on Friday. The S&P
financial sector index has dropped more than 3.9 percent
from a 4-1/2 year intraday high hit last month.
Dow component American Express fell 3 percent to
$72.97 and led financial shares lower. The stock extended its
weekly loss to 6.5 percent.
DuPont ranked as the Dow's second-biggest percentage
decliner, falling 2.2 percent to $52.68 after a brokerage cut
its price target on the stock following the company's
second-quarter earnings pre announcement on Thursday.
JPMorgan Chase & Co shares slid 1.9 percent to
$53.13 after the bank said its private equity unit, One Equity
Partners, will become independent and raise future funds from an
external group of partners.
Decliners beat advancers on the New York Stock Exchange by a
ratio of about 8 to 7. On the Nasdaq, about 18 issues fell for
every seven that rose.
About 5.5 billion shares exchanged hands on the New York
Stock Exchange, the Nasdaq and NYSE MKT, far below the daily
average so far this year of nearly 6.39 billion.
In contrast with the market's downturn, shares of Groupon
surged 11.5 percent to $7.65 after an analyst's upgrade
increased optimism about a recent strategy shift by the world's
largest daily deal company.
On the economic front, Thomson Reuters/University of
Michigan's preliminary index on consumer sentiment fell to 82.7
in June after touching a near six-year high of 84.5 in May.
June's reading was the second highest in the last eight months,
suggesting Americans were far from gloomy about their long-term
The overall U.S. producer price index rose more than
expected in May as gasoline prices rebounded, the Labor
Department reported. But underlying inflation pressures remained
muted, which could bolster the argument against an early
pullback in the Federal Reserve's stimulus program.