Wall Street ended on a sour note on Friday as a drop in energy stocks eclipsed wage data that supported expectations that the US Federal Reserve might hold off on an interest rate. Exxon Mobil shares dropped 4.58 per cent while Chevron lost 4.89 per cent after reporting poor quarterly earnings due to weak oil prices. The drop in those stocks, as well as additional declines in crude prices amid oversupply concerns, contributed to a 2.6 per cent decline in the energy index, its deepest one-day drop since January. “It’s all about rotation (between sectors). That’s what this market has been about since we’ve been in such a tight trading range this year,” said Dennis Dick, head of markets structure and a proprietary trader at Bright Trading LLC in Las Vegas. Initially helping share prices, US labor costs in the second quarter recorded their smallest increase in 33 years, with the Employment Cost Index edging up a less-than-expected 0.2 per cent. “The magnitude of the miss was definitely a bit of a surprise, especially as people were really gearing up for a September hike. This definitely puts a lower probability on that,” said Stanley Sun, interest rate strategist at Nomura Securities International in New York. Earlier in the week, many investors considered positive comments by the Fed about the economy as a signal that a rate rise could come as early as September. The Dow Jones industrial average ended down 0.31 per cent at 17,690.46. The S&P 500 finished 0.22 per cent lower at 2,103.92 after opening with a gain. The Nasdaq Composite edged down 0.01 per cent to 5,128.28. More stocks rose than fell in the S&P and Nasdaq. For the week, the Dow rose 0.7 per cent, the S&P added 1.2 per cent and the Nasdaq increased 0.8 per cent. For July, gains for the Dow, S&P and Nasdaq were 0.4 per cent, 2 per cent and 2.8 per cent, respectively. Despite the S&P’s negative close on Friday, half of the 10 major S&P 500 sectors were higher, with the utilities index’s 0.98 per cent rise leading the advancers. Stocks are a tad expensive and valuations will be a concern if earnings don’t continue to grow in the second half of the year, said Steve Freedman, senior investment strategist at UBS Wealth Management. With more than half of the S&P 500 companies having reported their second-quarter results, analysts expect overall earnings to edge up 0.9 per cent and revenue to decline 3.3 per cent, according to Thomson Reuters data. Coca-Cola Enterprises jumped 12.41 per cent after a Wall Street Journal report said the independent Coca-Cola bottling company is in merger talks with two European bottlers. LinkedIn slumped 10.52 per cent after the social network’s second-quarter results failed to connect with investors. Advancing issues outnumbered declining ones on the NYSE by 1.72 to 1. On the Nasdaq, winners beat losers by 1.33 to 1. The S&P index posted 40 new 52-week highs and 8 new lows; the Nasdaq Composite saw 100 new highs and 82 new lows. Some 6.8 billion shares changed hands on US exchanges, just above the daily average of 6.7 billion this month, according to BATS Global Markets.