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S&P 500, Dow nudge down a bit further from records

NEW YORK — U.S. stock indexes took a modest step back Friday, though they remain close to record highs. Energy stocks fell more than the rest of the market, and bond yields eased.

NEW YORK — U.S. stock indexes took a modest step back Friday, though they remain close to record highs. Energy stocks fell more than the rest of the market, and bond yields eased.

KEEPING SCORE: The Standard & Poor's 500 index fell 4 points, or 0.2 per cent, to 2,343, as of 12:45 p.m. Eastern time. It's on pace for its second straight decline after setting a record high Wednesday.

The Dow Jones industrial average fell 62 points, or 0.3 per cent, to 20,557 after hitting an all-time high Thursday. It's on pace for its first drop in seven days. The Nasdaq composite rose 3 points, or 0.1 per cent, to 5,818. Roughly two stocks fell for every one that rose on the New York Stock Exchange.

HITTING THE PAUSE BUTTON: The last two lackadaisical days for stocks follow a strong run, where stocks climbed quickly for weeks on stronger-than-expected reports on the economy and corporate earnings. Hopes for lower taxes and other business-friendly policies from Washington provided another big push.

Even with Friday's decline, the S&P 500 is still on track for its fourth weekly gain in a row.

The day's drop was more a result of investors looking to cash in some profits following the strong run for stocks than on any fear or need to get out of the market, said JJ Kinahan, chief market strategist at TD Ameritrade.

"People don't want unnecessary risk heading into a three-day weekend," he said. "This is more about taking off risk than about aggressive selling."

U.S. markets will be closed Monday for Presidents Day.

Kinahan pointed to calmness in the markets for the VIX index, which measures the cost to protect from future drops in the S&P 500, and for gold, a traditional landing spot when investors are nervous.

DROPPING YIELDS: The yield on the 10-year Treasury note fell to 2.42 per cent from 2.45 per cent late Thursday. The two-year yield dipped to 1.19 per cent from 1.21 per cent, and the 30-year Treasury yield sank to 3.02 per cent from 3.05 per cent.

BACK TO THE KITCHEN: Kraft Heinz surged after it made an offer to buy European consumer goods giant Unilever, only to get rejected. Unilever said the bid was too low. It offered 18 per cent more than where Unilever's shares closed on Thursday. Kraft Heinz, which is behind the Lunchables and Oscar Mayer brands, jumped $6.64, or 7.6 per cent, to $93.92. U.S.-listed shares of Unilever, which sells Breyers ice cream, Dove soap and Q-tips, surged $5.00, or 11.7 per cent, to $47.57.

KICKED IN THE CAN: Campbell Soup had the biggest drop in the S&P 500 after the company surprised analysts by reporting weaker revenue in its latest quarter than a year earlier. Its earnings were better than Wall Street had forecast, however. Shares fell $4.29, or 6.9 per cent, to $58.26.

JAMMED UP: J.M. Smucker fell after it lowered its forecast for sales this year. It reported earnings for the latest quarter that met expectations. The company, whose brands include Folgers and Crisco, fell $5.26, or 3.8 per cent, to $132.58.

MORE CLOUDS AHEAD: General Mills also warned of tougher times ahead. It said weaker-than-expected sales for its yogurt and soup brands pushed it to cut its sales and profit forecast for its fiscal year, which ends in May. Its stock fell $2.18, or 3.5 per cent, to $59.36.

AROUND THE WORLD: In Europe, the French CAC 40 index fell 0.7 per cent, Germany's DAX dipped less than 0.1 per cent and the U.K. FTSE 100 rose 0.3 per cent. In Asia, Japan's Nikkei 225 index fell 0.6 per cent, the Hang Seng in Hong Kong fell 0.3 per cent and South Korea's Kospi index slipped 0.1 per cent.

CURRENCIES: The dollar fell to 112.80 Japanese yen from 113.11 yen late Thursday. The euro fell to $1.0644 from $1.0677, and the British pound fell to $1.2438 from $1.2497.

COMMODITIES: Benchmark U.S. crude oil fell 19 cents to $53.56 per barrel. Brent crude, the international standard, fell 7 cents to $55.58 per barrel. Gold fell $1.60 to $1,240.00 per ounce, silver fell 3 cents to $18.05 per ounce and copper fell 1 cent to $2.70 per pound.

Stan Choe, The Associated Press

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