Telecom and utilities, often seen as bond proxies, led the charge lower, while health-care, tech, and financials finished slightly higher. The index saw a 0.7% decline since last Friday, marking its second straight weekly fall.
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The Standard & Poor’s 500 index added 5 points, or 0.3 percent, to 2,178. South Korea’s Kospi .ks11 dropped 0.2 percent, on track for a 0.9 percent slide for the week.
Federal Reserve: In Jackson Hole, Wyoming, Yellen told a conference of central bankers that the US economy might be strong enough for an interest rate hike. Wall Street, anticipating a decidedly more hawkish posture from the Fed boss, temporarily sent shares higher after a brief, initial knee-jerk move lower.
“In light of the continued solid performance of the labor market and our outlook for economic activity and inflation, I believe the case for an increase in the federal funds rate has strengthened in recent months”, Ms. Yellen said in remarks prepared for delivery here.
Phil Orlando, a strategist at Federated Investors in NY, said: ‘We continue to believe December was the next logical date for a hike but based on comments from Fed officials lately and the argument from Yellen I guess you can’t take September off the table’.
Stocks have benefited from a protracted period of ultraloose monetary policy. Nevertheless, Friday’s speech indicates that a rate increase may indeed be coming sooner rather than later.
Ms. Yellen said her worries had dissipated.
“The Fed served notice that a rate hike is still a possibility this year, and the markets had gotten a little complacent”, said Anthony Valeri, investment strategist for LPL Financial in San Diego.
Wall Street sees the chance of rate increase at the Fed’sSept.
The Fed raised rates in December, its first hike in almost a decade, but it has held off further increases so far this year due to a global growth slowdown, financial market volatility and an inflation rate persistently below its 2 percent target. The market sees the likelihood of a rate increase in December at 58% from 52% the day prior.
Figures published yesterday showed the USA economy grew at an annual rate of 1.1 per cent in the second quarter of the year.
The “fan chart” of likely interest rates, wide enough to encompass a range of outcomes and market rate predictions, is a change the Fed has discussed as a permanent addition to its quarterly summary of economic projections.
“Investors are struggling to find anything new in the speech and that maybe by-design by Yellen”.
In company news, Herbalife lost 2.3 per cent to $US60.50 after a report said Carl Icahn, the nutritional supplement maker’s top shareholder, was looking to sell his stake. US stocks were modestly lower on Thursday, weighed down by a drop in healthcare and consumer companies.
OIL: Benchmark U.S. crude oil shed 25 cents to $47.09 a barrel from $47.33. European stocks also tilted up after oil turned positive, while Asia closed mixed.
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JP Morgan was up 1% to $66.74 and Goldman Sachs rose 0.5%.
