Stocks fell Friday, closing out what was the worst week of the year for the Dow Jones Industrial Average.

Market recap

The Dow Jones industrial average fell 30.72 Friday to close at 15,081.47. The S&P 500 lost 5.49 to end the week at 1,655.83. The Nasdaq composite index shed 3.34 during the session to fall to 3,602.78

Year to date:

The Dow is up 15.1%

The S&P 500 is up 16.1%

The Nasdaq is up 19.3%

Source: AP

The market was dragged lower by a weak performance from retailers and companies sensitive to higher interest rates. Homebuilders and banking stocks were among the best performers.

Stocks had a decent start in the first half of the week, but investors were hit hard in the last three days.

Overall, the Dow retreated 2.2 percent for the week, its worst for 2013. The broader S&P 500 index lost 2.1 percent for the week, its second-worst performance of the year.

The possibility of a cutback in the Federal Reserve’s bond-buying program in September has roiled the bond market in the last couple of weeks, which in turn spilled over into the stock market. The yield on the benchmark U.S. 10-year Treasury note rose to 2.83 percent, its highest level since July 2011. A week ago, the yield was 2.58 percent. In the bond market, yields rise as bond prices fall.

“When yields are going up like this, that’s scary for most equity investors,” said Brian Reynolds, chief market strategist at Rosenblatt Securities.

Shares of utilities and telecommunications companies, which typically perform poorly in a higher interest-rate environment, closed broadly lower.

Retailers continued their selloff. Nordstrom gave a bleak sales outlook late Thursday that echoed similar forecasts from Wal-Mart and Macy’s earlier this week. The outlooks have raised worries that shoppers might be pulling back on spending.

The retail industry is a closely watched part of the U.S. economy as consumer spending makes up roughly 70 percent of economic activity. The disappointing outlooks are worrisome because they take into account the back-to-school shopping season, typically the second-biggest shopping period for U.S. retailers.

“It’s left us scratching our heads,” said John Fox, who oversees $873 million in assets as co-manager of the FAM Value Fund. “It really forces you to ask the question: ‘Is the consumer slowing down?”’

Investors have also been concerned about what will happen to the stock market — and the U.S. economy — if the Fed begins winding down its $85 billion-a-month bond-buying program in September. Some investors think that the Fed’s program has been a large contributor to the stock market’s record run.

“The big question is, will the Fed eliminate the bond-buying program in September, and, if so, how they will they remove the bond buying,” said Frank Davis, director of sales and trading for LEK Securities.

Reynolds said investors should expect more selling ahead of the Fed’s decision.

“Expect a correction, but a shallower correction than the one that happened in June,” he said.

With the bond market in decline and stocks selling off, investors shifted into another asset — gold.