USA stocks ticked downward Monday at the start of a trading week that could be defined by Federal Reserve chair Janet Yellen’s much-anticipated speech Friday on the economy and interest-rate policy.
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At 11:27 a.m. ET (1527 GMT), the Dow Jones industrial average was down 52.94 points, or 0.29 percent, at 18,499.63.
“The behavior of employment has been remarkably resilient”, he said, adding that inflation outside of food and energy prices was “within hailing distance” of 2%, the Fed’s target rate.
Oil prices fell more than 2 percent, retreating from last week’s two-month highs, on worries about burgeoning Chinese fuel exports, more Iraqi and Nigerian crude shipments and a rising USA oil rig count.
Aug 22 Wall Street was lower on Monday as oil prices fell and investors remained cautious ahead of Federal Reserve Chair Janet Yellen’s speech this week.
Stocks erased an early loss and were mostly flat in midday trading Monday.
Investor sentiment was earlier boosted by a couple of multi-billion dollar deals on Monday, including Pfizer’s $14 billion acquisition of cancer drug maker Medivation. The Standard & Poor’s 500 index was down 0.2% and the Nasdaq composite index fell 0.1%. Brent crude, the global benchmark, declined $1.54 to $49.34 a barrel. Pfizer is buying Medivation for its heavily used prostate cancer drug Xtandi, which generates roughly $2 billion in sales a year.
Treasury prices initially weakened after hawkish remarks over the weekend by Fed Vice Chairman Stanley Fischer, who said the central bank is within reach of its twin targets (http://www.marketwatch.com/story/feds-fischer-we-are-close- to-our-targets-2016-08-21) of maximum sustainable employment and an inflation rate of 2%.
While investors do not expect the central bank to raise interest rates at its September meeting, there’s always the possibility and the increasing likelihood of a rate increase once the presidential election is finished.
Gold stocks have also come under pressure amid a drop by the price of the precious metal, while substantial strength is visible among biotechnology stocks. He added, however, that the dollar would likely trade within a tight range ahead of Yellen’s speech.
BONDS, CURRENCIES: U.S. government bond prices rose.
Medivation’s shares jumped almost 20 percent, while Dow component Pfizer rose 0.6 percent. The yield on the 10-year Treasury note fell to 1.55 percent from 1.58 percent late Friday.
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The dollar index, which tracks the greenback against a basket of six major currencies, was last up 0.07 percent at 94.58.DXY after falling about 1.3 percent last week. The euro turned slightly negative, losing.04 percent against the dollar at $1.1305 EUR=.
