There was a positive in the economic data as the University of Michigan consumer sentiment report for October jumped to a five-year high of 83.1 from 78.3 in September and beat the consensus estimate of 78 on an improving outlook on the economy.
The survey's five-to-10-year inflation expectation slid to 2.6% from 2.8%, which the Fed officials who pushed for QE3 are likely to be "thrilled" about, noted John Ryding and Conrad DeQuadros, the founders of research firm RDQ Economics.
In other data, the Bureau of Labor Statistics reported that the producer price index rose 1.1% in September after advancing 1.7% in August. Economists were expecting the index to rise 0.7%.
The core read, which excludes food and energy costs, was unchanged after rising 0.2%. Economists were anticipating an uptick of 0.2%.The FTSE 100 in London was down 0.30% and the DAX in Germany was falling 0.30% as uncertainty over Spain's bailout plans overshadowed better-than-expected August eurozone industrial output figures. The Nikkei Average in Tokyo closed down 0.15% Friday and the Hang Seng in Hong Kong finished up 0.65% ahead of Chinese trade data set to be published this weekend. November crude oil futures settled down 21 cents at $91.86 a barrel while December gold futures lost $10.90 to settle at $1,759.70 an ounce. The benchmark 10-year Treasury rose 5/32, pushing the yield down to 1.660%. The greenback fell 0.16%, according to the dollar index. In corporate news, Ecolab (ECL), the developer and marketer of products and services for the hospitality, foodservice, health care and industrial markets said it has agreed to buy privately held energy products and services company Champion Technologies for $2.2 billion in cash and stock. The stock rose 4%. STMicroelectronics ( STM ) is reportedly exploring the possibility of breaking itself up. STMicroelectronics' ADRs gained 6.4%. Shares of Advanced Micro Devices (AMD) plunged 14.4% after the no. 2 chip maker forecast third-quarter revenue of $1.27 billion, a 10% sequential decline. Previously, AMD had predicted a sequential decrease of 1%, plus or minus 3%. Analysts were looking for sales of $1.38 billion.