By Yashaswini Swamynathan
Wall Street edged lower on Tuesday after Federal Reserve Chair Janet Yellen said the central bank will likely need to raise interest rates at an upcoming meeting, but expressed uncertainty over economic policy under the Trump administration.She did not say if the Fed still planned for three rate hikes this year, as it had signaled in December. Nor did she give indications if a hike might come at its meeting in March or in June, as most analysts expect.While President Donald Trump's pro-business stance sparked a record-setting rally in equities, he has given scant detail on his policies, giving the Fed limited visibility on the direction of the economy."It is too early to know what policy changes will be put in place or how their economic effects will unfold," Yellen said.She said delaying rate hikes could leave Fed policymakers behind the curve and lead to quicker rate hikes down the line, which could cause a recession.
Yellen's rate hike comments lifted the dollar and U.S. Treasury yields, while boosting the S&P financial sector, which rose 0.8 percent. Bank stocks were the top gainers on the S&P and the KBW banking index rose 1.3 percent.Nine of the 11 major S&P sectors were lower, led by the high dividend-yielding utilities and real estate sectors, both of which were down more than 1 percent."While emphasizing the broadening improvements in the U.S. economy, Chair Yellen highlighted the still-uncertain outlook, including on account of possible changes in fiscal policy and 'developments abroad,' and thus the importance of a highly responsive monetary policy." said Mohamed El-Erian, chief economic adviser at Allianz in Newport Beach, California.
At 10:49 a.m. EDT the Dow Jones Industrial Average was down 9.17 points, or 0.04 percent, at 20,402.99, the S&P 500 was down 3.96 points, or 0.17 percent, at 2,324.29 and the Nasdaq Composite was down 9.32 points, or 0.16 percent, at 5,754.63.General Motors was the biggest percentage gainer on the S&P, rising 3.9 percent after Peugeot-owner PSA Group said it is in talks to buy GM's European Opel business.
The prospects of sector consolidation caused Fiat to jump 3.7 percent, while Ford gained 0.6 percent.Declining issues outnumbered advancers on the NYSE by 1,896 to 875. On the Nasdaq, 1,522 issues fell and 1,129 advanced.The S&P 500 index showed 36 new 52-week highs and no new lows, while the Nasdaq recorded 68 new highs and 11 new lows. (Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Savio D'Souza)
This story has not been edited by Firstpost staff and is generated by auto-feed.
Published Date: Feb 14, 2017 11:15 pm | Updated Date: Feb 14, 2017 11:15 pm