Stocks fall as Fed momentum tapers off; Dow off 130

Stocks ended lower Friday after three straight days of gains as momentum from the Fed's decision Wednesday not to raise interest rates this month tapered off.

The Dow Jones industrial average ended down 131 points, or 0.7%, and the Standard & Poor's 500 index dropped 0.6%. The Nasdaq composite index pulled back after setting a new record close Thursday of 5339.52 as the tech-heavy index dropped 0.6%.

Despite Friday's drop, all three major indexes posted gains for the week.

The Federal Reserve's decision to keep rates steady on Wednesday has provided a boon to the markets this week as investors continue to grapple with the prospect of higher interest rates in the near future. Fed policymakers strongly signaled that a rate hike in December was a possibility.

One jolt for the market was a CNBC report that social-media site Twitter could soon receive an acquisition bid, possibly from Salesforce (CRM) or Google (GOOGL). Twitter (TWTR) shares soared almost 20%.

Oil prices took a volatile path, falling in early trading Friday before paring those losses on hopes of a deal between Iran and Saudi Arabia. But although Saudi Arabia reportedly offered to slash production if Iran freezes output, few oil industry observers expect a lasting agreement and prices fell sharply again.

"We aren't holding our breath," Bespoke Investment Group said Friday morning in a note.

West Texas Intermediate crude oil, the U.S. benchmark, was down 1.8% to 444.49 in afternoon trading.

Follow Paste BN reporter Nathan Bomey on Twitter @NathanBomey.