The News Bee

Stocks end lower after Yellen remarks

Stocks end lower after Yellen remarks

Stocks ended lower ahead of the Memorial Day holiday weekend as Federal Reserve Chair Janet Yellen reconfirmed that the central bank remains on track to raise interest rates this year. In an afternoon speech, Yellen said any rate hikes will be done gradually and will depend on an expected economic rebound in the second-quarter.the-percentage-of-americans-playing-the-stock-market-is-at-an-all-time-low

Market reaction to the speech was fairly muted. The Nasdaq composite, positive for much of the day — and on track for a new closing high — remained above break-even until the end of trading. It finished down 0.3%, losing 1.4 points to settle at 5089.36. The index remains just shy of its April 26 record close of 5092.09. The Dow Jones industrial average lost 0.3%, or almost 54 points, to end at 18,232.02. Losing 0.2% was the S&P 500, down 4.8 points to 2126.06.

On Wednesday, in the release of the minutes of its April 28-29 meeting, the Fed suggested that it was “unlikely” that they would hike rates in June. Financial markets began speculating the Fed would delay a rate hike given the weak spate of economic data that has been released recently. But Yellen’s remarks reiterated those she and other Fed officials have been saying the past few months. “If the economy continues to improve as I expect, I think it will be appropriate at some point this year to take the initial step to raise the federal funds rate target,” Yellen said in a speech at the Providence Chamber of Commerce in Rhode Island.

The latest data on inflation released Friday was mixed as consumer prices rose just 0.1% in April but core prices, excluding volatile energy and food costs, rose a more-than-expected 0.3%, according to the the Labor Department.

Overseas, Asian markets were higher as Chinese stocks hit a seven-year high on hopes for further economic stimulus. Japan’s Nikkei 225 index gained 0.3% and Hong Kong’s Hang Seng index rose 1.7%. The Shanghai Composite surged 2.8%. European shares were mostly mixed as Britain’s FTSE 100 was up 0.3% and Germany’s DAX index fell 0.4%. Stocks ended higher Thursday — the Dow just barely — as the S&P 500 notched a new closing high of 2130.82.

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