The Dow Jones industrial average dropped 0.1 percent to 25,369.13 while the Nasdaq composite fell 0.1 percent to 7,153.57. Investors are now looking ahead to the latest quarterly corporate earnings reports and consumer price inflation report later during the US trading day. Investors dumped bond-proxies, or stocks such as utilities, real estate and telecoms.
The yield on the 10-year Treasury note held steady at 2.54% after climbing as high as 2.59% in the morning. Rates have been ultra-low since the recession, a culmination of a decline in bond yields over the past three-plus decades.
While a quick jump in rates could easily jolt markets out of the calm ride they've been on, investors say markets are prepared for a gradual rise.
That pushed the yield on the two-year Treasury to 2.00% from 1.98% late on Thursday.
But stocks absorbed the gains without a hiccup, unlike earlier in the week when rate worries helped send the Standard & Poor's 500 lower for its lone blemish this year.
Businesses will need to produce strong growth to justify the gains their stocks have made, and expectations are also high that CEOs will unveil encouraging profit forecasts for 2018 after Washington cut their income-tax rates.More news: Important Analyst Opinions: GrubHub Inc. (GRUB), British American Tobacco plc (BTI)
Expectations are generally high, and analysts are forecasting growth of almost 11% for S&P 500 earnings per share, according to S&P Global Market Intelligence.
The S&P 500 climbed 14 points, or 0.5 percent, to 2,782.
Real-estate stocks fell 1.5 percent for the sharpest loss of the 11 sectors in the S&P 500.
DIVIDENDS DULLED: Telecom stocks and utilities lagged well behind the market. It credited stronger demand and fares.
Signet Jewelers had the largest loss of the S&P 500 after it reported weaker sales for the holiday season than a year earlier.
Domino's Pizza fell 3.2% to $200.09 after it said its chief executive, Patrick Doyle, will leave at the end of June.More news: Traders Focused Stocks: Barnes & Noble, Inc. (BKS), Teekay Offshore Partners LP (TOO)
Intuitive Surgical climbed 6.6% to $423.76 after the Sunnyvale, Calif., maker of robotic surgery devices said its fourth-quarter revenue will be greater than Wall Street expected.
CURRENCIES: The dollar was steady at 111.27 Japanese yen, its lowest since November.
Target rose 3.4 percent. The euro strengthened to a four-month high after the European Central Bank indicated in its latest report that it might revise the outlook for its stimulus program, rising to $1.2049 from $1.2033 late Thursday.
In the commodities markets, gold rose $5.60 to settle at $1,319.30 an ounce.
In overseas stock markets, Japan's Nikkei 225 index fell 0.3 percent, South Korea's Kospi lost 0.4 percent and the Hang Seng in Hong Kong added 0.2 percent. Copper rose 2 cents to $3.24 a pound. Benchmark U.S. crude slipped 22 cents to $63.58 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the worldwide standard, gained 61 cents to 69.87 dollars per barrel.
France's CAC 40 fell 0.3 percent, the FTSE 100 in London added 0.2 percent and Germany's DAX lost 0.8 percent.More news: Trump uses expletive in immigration remarks
This article was originally published at 7:50 a.m.