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U.S. stocks waver as Fed Chair Yellen testifies before Congress

English.news.cn   2014-07-16 06:15:41

NEW YORK, July 15 (Xinhua) -- U.S. stocks closed mixed after they fluctuated between gains and losses Tuesday, as Federal Reserve Chair Janet Yellen said in her testimony to Congress that stocks in some sectors appear "stretched."

The Dow Jones Industrial Average closed at 17,060.68 points, up 5.26 points, or 0.03 percent, after briefly hitting an all-time intraday high of 17,120.34 points in earlier session.

The S&P 500 went down 3.82 points, or 0.19 percent, to 1,973.28. The Nasdaq Composite Index fell 24.03 points, or 0.54 percent, to 4,416.39.

The market staged a volatile session as investors were trying to digest mixed comments by the Fed chief who expressed concerns about equity valuation in some sectors, while also signaling that the U.S. central bank would not be in a hurry to hike interest rates in her testimony to the Senate Banking Committee.

She emphasized that the U.S. economy needs to be on solid trajectory before the Fed raises rates.

A Fed report accompanying Yellen's testimony said that " valuation metrics in some sectors appear substantially stretched, particularly for smaller firms in the social media & biotech industries, despite notable downturn in equity prices for such firms early in the year."

Shares of social networking site Facebook and microblogging site Twitter all dipped on Yellen's remarks.

A pair of better-than-expected earnings reports from two bank giants, also Dow components, boosted market sentiment to some extent, which helped the blue-chip index recoup all earlier losses.

J.P. Morgan Chase & Co. reported a net income for the second quarter of 6 billion U.S. dollars, or 1.46 dollars per share, both lower than those of the year-ago period, but they still beat market expectations.

Goldman Sachs on Tuesday morning reported net revenues of 9.13 billion dollars and net earnings of 2.04 billion dollars, or 4.10 dollars per diluted common share, for the second quarter. The results also topped analysts' forecast.

On the economic front, manufacturing activity in the New York region improved significantly for a third consecutive month in July, with the Empire State manufacturing index rising to 25.6, the highest in more than four years.

Moreover, U.S. retail and food services sales rose 0.2 percent in June on a seasonally adjusted basis, said the U.S. Commerce Department.

U.S. business inventories, a key component of gross domestic product changes, rose 0.5 percent in May, the department said in a separate report. The reading was slightly below market consensus, but it still pointed to a pickup in the U.S. economy in the second quarter.

In addition, U.S. import prices advanced 0.1 percent in June following a 0.3 percent rise in May, driven by higher fuel prices, while export prices decreased 0.4 percent in the past month, said the U.S. Labor Department.

The CBOE Volatility Index, often referred to as Wall Street's fear gauge, rose slightly by 1.18 percent to end at 11.96.

In other markets, the U.S. dollar recovered against most major currencies Tuesday amid Yellen's testimony. In late New York trading, the euro fell to 1.3568 dollars from 1.3618 dollars of the previous session. The greenback bought 101.71 Japanese yen, higher than 101.58 yen of the previous session.

Crude prices fell as market expected more crude supplies from the Middle East. Light, sweet crude for August delivery moved down 95 cents to settle at 99.96 dollars a barrel on the New York Mercantile Exchange.

Gold futures continued to fall, with the most active gold contract for August delivery losing 9.6 dollars, or 0.73 percent, to settle at 1,297.1 dollars per ounce.

Editor: Mu Xuequan
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