“The big question is, will the Fed eliminate the bond-buying program in September, and, if so, how they will they remove the bond buying,” said Frank Davis, director of sales and trading for LEK Securities.
With the bond market declining and stocks selling off, investors shifted into a safer asset — gold. Its price rose $10.1, or 0.7 percent, to $1,371. Gold had its third-best week this year, rising 3.7 percent.
Also in focus were homebuilders. The government reported that new home construction was up 6 percent in July to a seasonally-adjusted rate of 896,000.
Shares of homebuilders PulteGroup Inc., and Lennar Corp. closed up 2.3 percent and 1.8 percent, respectively.
Housing has been one of the bright spots of the U.S. economy for the last several months. In June, home builders sought the most building permits for single-family homes in five years. New-home sales jumped in June to their highest level in five years as well.
In other news, personal computer maker Dell Inc. reported a 72-percent drop in its fiscal second-quarter earnings. That may help convince Dell shareholders to approve the $24.8 billion buyout proposed by founder Michael Dell. and private-equity firm Silver Lake.
Shares of Dell rose 12 cents, or 0.8 percent, to $13.82 - below the proposed buyout price of $13.88 per share.