Q2 labor costs surprisingly saw their smallest increases in decades but this was not enough to lift the market with the hits the energy sector took today so the Dow slumped a modest 56 points.  The upside is that the trend in lower wages put the likelihood of a September rate hike much lower.  As more Q2 reports come in, the revenue forecasts have once again been adjusted from yesterday's minus 3.6% (minus 4.0% just a few weeks ago) to today's minus 3.3%.  They've been bumping it up daily so it'll be interesting to see where it is this time next week.  At 6.8 billion, volume was in line with recent averages.

Markets | Fri Jul 31, 2015 7:29pm EDT

Wall Street ends lower as weak oil weighs

BY NOEL RANDEWICH

DJ:    17,689.86  -56.12      NAS:      5,128.28  -0.50         S&P:      2,103.84  -4.79

(Reuters)  Wall Street ended on a sour note on Friday as a drop in energy stocks eclipsed wage data that supported expectations that the U.S. Federal Reserve might hold off on an interest rate.

Exxon Mobil (XOM.N) shares dropped 4.58 percent while Chevron (CVX.N) lost 4.89 percent 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 percent decline in the energy index .SPNY, 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, U.S. 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 percent.

"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 theeconomy as a signal that a rate rise could come as early as September.

The Dow Jones industrial average .DJI ended down 0.31 percent at 17,690.46. The S&P 500.SPX finished 0.22 percent lower at 2,103.92 after opening with a gain. The NasdaqComposite .IXIC edged down 0.01 percent to 5,128.28.

More stocks rose than fell in the S&P and Nasdaq.

For the week, the Dow rose 0.7 percent, the S&P added 1.2 percent and the Nasdaqincreased 0.8 percent. For July, gains for the Dow, S&P and Nasdaq were 0.4 percent, 2 percent and 2.8 percent, 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 .SPLRCU 0.98 percent 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 percent and revenue to decline 3.3 percent, according to Thomson Reuters data.

Coca-Cola Enterprises (CCE.N) jumped 12.41 percent after a Wall Street Journal report said the independent Coca-Cola bottling company is in merger talks with two European bottlers.

LinkedIn (LNKD.N) slumped 10.52 percent 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 U.S. exchanges, just above the daily average of 6.7 billion this month, according to BATS Global Markets.