USA stocks slumped slightly in late-morning trading Friday after Federal Reserve Chair Janet Yellen signaled the possibility of an interest-rate increase later this year.
Advertisement
Crude oil prices increased as Yellen’s speech began.
The Standard & Poor’s 500 index slipped 2 points, or 0.1 percent, to 2,169. In contrast, sectors likely to be hurt by higher rates, such as utilities and telecoms, fell.
KEEPING SCORE: The Dow Jones industrial average rose 71 points, or 0.4 percent, to 18,520 at 9:53 a.m. In Friday’s volatile session, the sensex closed a marginal 0.2%, or 54 points, lower at 27,782 with foreign funds net buying Rs 341 crore, BSE data showed.
Yellen, speaking at a conference of monetary officials in Jackson Hole, Wyoming on Friday, said the case for raising interest rates has strengthened given improvements in the economy.
Investors see the chances of a September rate move as a “binary event”, she said, which means that an omission of any “date guidance” on the next rate move or the lack of any specific reference to the September meeting would likely be “overinterpreted” as a dovish signal, Komileva said.
“Her comments were reinforced by Fischer”.
“I think for us here in New Zealand, another big positive would be that the USA dollar continues to strengthen, which would see the NZ dollar fall a little, boosting the export sector and dairy prices, while taking some pressure off the Reserve Bank”, Lister said.
When a pre-disposed dove tells you that the case for a rate hike has strengthened, you respect that, especially if it’s coming from the Fed chair”, said Mazen Issa, senior FX strategist at TD Securities in New (KOSDAQ: “160550.KQ – news) York.
“Anything that’s not going to be straight-out dovish is going to be disappointing”, she said.
Wall Street spent the week biding its time before Federal Reserve Chair Janet Yellen made a speech on Friday. The economy actually grew at less than half that pace and forecasts since then have generally proved rosier than reality. “That is very anemic”.
Concerns about the strength of the USA economy remain, and were underscored by Friday’s second estimate of US gross domestic product that showed second-quarter growth was slightly lower than previously thought.
Since exiting the recession in the summer of 2009, the US economy has been growing sluggishly, making it the slowest recovery since World War II. That would be the fourth quarter in a row of drops.
In Asia, Japan’s Nikkei 225 fell 1.2 percent after consumer prices fell the most in three years in July. Hong Kong’s Hang Seng index rose 0.4 percent. Brent crude, used to price oil internationally, gained 43 cents to $50.10 a barrel. The euro rose to $1.1291 from $1.1285. The dollar fell to 100.45 yen from 100.58 yen the previous day.
Advertisement
The materials group, which includes precious and base metals miners and fertilizer companies, lost 0.4 percent.
