Stocks lose for day, close May with gains

Trader Robert Osborne, second from left, works on Trader Robert Osborne, second from left, works on the floor of the New York Stock Exchange Friday. The Dow is up 3.3 percent this month and is on track to record its first gain in May since 2009. (May 31, 2013) Photo Credit: AP

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Stocks dropped sharply in late trading Friday on Wall Street but still managed to end the month higher.

After moving between small losses and gains for most of the day, the stock market started to drift lower in afternoon trading. The sell-off accelerated in the final hour. The Dow Jones industrial average ended the day with its biggest loss in nearly six weeks, falling more than 200 points.

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Some traders said the sudden afternoon swoon was due to investors rebalancing their holdings at the end of the month. As stocks fell, bonds rallied. The yield on the 10-year Treasury note, which had risen as high as 2.20 percent during the day, fell to 2.13 percent in late trading. Yields fall as bond prices rise.

Friday, there was both encouraging and disappointing news on the economy.

Stock indexes started the day slightly lower after the Commerce Department reported that U.S. consumer spending fell 0.2 percent in April, the first decline since last May.

That news was offset by a report released later showing that a measure of U.S. consumer confidence jumped to the highest level in almost six years in May, lifted by rising home prices and record-high stock prices.

The Dow closed down 208.96 points to 15,115.57. It was the biggest loss for the index since April 15, when markets plunged after worries about an economic slowdown in China. The Standard & Poor's 500 index fell 1.43 percent to 1,630.74. The Nasdaq composite sank 1.01 percent to 3,455.91.

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