Stocks Slip Ahead Of Yellen Speech

Wall Street ended slightly lower Thursday as investors await a much-anticipated speech by Federal Reserve Chairwoman Janet Yellen on Friday that may offer clues to the central bank’s next rate move.

The Dow Jones Industrial Average DJIA, -0.18% slid 33.07 points, or 0.2%, to close at 18,448.41.

The S&P 500 index SPX, -0.14% fell 2.97 points, or 0.1%, to close at 2,172.47, with the health-care sector leading the decline, while the Nasdaq Composite Index COMP, -0.11% shed 5.49 points, or 0.1%, to end at 5,212.20.

According to Mark Kepner, managing director of sales and trading at Themis Trading, “The market was gripped in a state of suspended animation” with weak trading volume as investors await news out of Jackson Hole, Wyo., where Yellen will be headlining the Kansas City Fed’s annual symposium. Yellen is scheduled to speak at 10 a.m. Eastern on Friday.

“I don’t think people want to trade without knowing what Yellen will say tomorrow,” said Kepner who believes there is “no harm” in the Fed waiting until December to tighten monetary policy.

Analysts Divided

Analysts are divided on whether the Fed will introduce another rate hike just yet, but the sense is that Yellen will set the tone for an increase in the not too distant future. Still, there are those who see global economic weakness as a reason for the Fed keeping rates steady.

Paul Nolte, portfolio manager at Kingsview Asset Management sees, “Central banks around the world …. throwing money out the window and we’re going to be the lone wolf raising rates?” A rate hike would create “another whole set of issues with a strong dollar,” with which markets must contend. According to Nolte, a stronger buck has been blamed for hurting earnings of multinational companies as they repatriate their sales in U.S. dollars.

Disclosure: None. 

How did you like this article? Let us know so we can better customize your reading experience.


Leave a comment to automatically be entered into our contest to win a free Echo Show.