Wall Street stocks fell on Friday as a better-than-expected U.S. jobs report raised expectations that the Federal Reserve will increase interest rates by midyear, while renewed worries over Greece's debt negotiations added to the bearish tone.
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The S&P 500 index of utilities <.SPLRCU>, often used as a bond proxy by investors in a low-rate environment, fell 4.1 percent, its biggest daily drop since August 2011, as U.S. government debt yields jumped.
In another sign of concern about interest rates, Simon Properties <SPG.N>, a real estate investment trust, sank 4 percent at $195.08.
But the financial sector <.SPSY>, which tends to benefit from rising interest rates, rose 0.7 percent.
Still, all three major indexes registered strong gains for the week, with the Dow industrials rising 3.8 percent for its biggest weekly gain since January 2013.
Nonfarm payrolls increased more than expected in January and wages rebounded, while employment numbers for November and December were revised sharply higher, the U.S. Labor Department reported. The unemployment rate ticked up to 5.7 percent as a result of an increased labor force.
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After the report, traders added to bets that the U.S. central bank will start to hike interest rates by midyear.
"With the stronger-than-anticipated employment report, there's discussion the Fed might move earlier rather than later ... so we've seen the financial sector do well and the interest rate-sensitive utilities sector do poorly," said Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama.
Adding to that, "the negotiations on the Greek debt weighed on the market this afternoon," he said.
Euro zone finance ministers are waiting to hear on Feb. 11 how Greece wants to become financially independent, the chairman of the ministers said. Greece must apply for a bailout extension by Feb. 16 at the latest to ensure that the euro zone keeps backing it financially, the Eurogroup chairman told Reuters.
The Wall Street Journal on Friday said Greece was rebuffed by lenders for $5 billion in short-term debt; the country is facing a cash crunch because the EU wants more reforms.
The Dow Jones industrial average <.DJI> fell 60.59 points, or 0.34 percent, to 17,824.29, the S&P 500 <.SPX> lost 7.05 points, or 0.34 percent, to 2,055.47,, and the Nasdaq Composite <.IXIC> dropped 20.70 points, or 0.43 percent, to 4,744.40.
For the week, the S&P 500 was up 3 percent, its best weekly gain since December, while the Nasdaq was up 2.4 percent.
About 7.7 billion shares changed hands on U.S. exchanges, compared with the 7.9 billion average for the last five sessions, according to data from BATS Global Markets.
Among the day's gainers, Twitter <TWTR.N> jumped 16.4 percent to $48.01 after any earnings report on Thursday that beat Wall Street's profit and revenue targets in the fourth quarter.
Declining issues outnumbered advancing ones on the New York Stock Exchange by 1,961 to 1,128, for a 1.74-to-1 ratio on the downside. On the Nasdaq, 1,458 issues fell and 1,260 advanced for a 1.16-to-1 ratio favoring decliners.
The benchmark S&P 500 index posted 43 new 52-week highs and two new lows; the Nasdaq Composite recorded 99 new highs and 26 new lows.
(By Caroline Valetkevitch; Additional reporting by Chuck Mikolajczek; Editing by Jonathan Oatis)