By Yashaswini Swamynathan
Wall Street trimmed gains sharply on Friday as financial stocks lost steam and focus shifted to Federal Reserve Chair Janet Yellen's speech. The S&P 500 financial index .SPSY was up 0.44 percent, after rising as much as 1.5 percent following JPMorgan (JPM.N), Citigroup (C.N) and Wells Fargo (WFC.N) market-beating results.However, Wells Fargo shares fell 0.7 percent as the bank struggles with a sales scandal that cost Chief Executive John Stumpf his job. JPMorgan and Citi were flat. Yellen is due to speak at a conference in Boston where she could offer her thoughts on the growing support for an interest rate hike in the near term.A sustained growth in the labor market and improving inflation have encouraged policymakers such as Boston Fed President Eric Rosengren, who said on Friday that placing "very high" odds on a rate hike in December seemed appropriate. Traders have currently priced in a 67 percent chance of a rate hike in December, while the odds for November are minimal as the Fed's meeting falls just days before the Nov.8 U.S. presidential election.
"We don't expect a departure from the script, which was laid out at the minutes of the September meeting, and expect the Fed to continue moving on a path toward a December rate hike," said Bill Northey, chief investment officer at the Private Client Group of U.S. Bank. Major U.S. stock indexes have been swinging between losses and gains since Monday due to uncertainty regarding the quarterly earnings season and the outcome of a tightly run U.S. presidential race.The three indexes are on track for the second straight weekly loss. While earnings of S&P 500 companies are expected to fall 0.7 percent - marking the fifth straight quarter of decline - some investors hope that enough companies will beat analysts' expectations for the index to end the season with a slight gain.
At 12:27 p.m. ET (1627 GMT), the Dow Jones industrial average .DJI was up 54.3 points, or 0.3 percent, at 18,153.24.The S&P 500 .SPX was up 2.38 points, or 0.11 percent, at 2,134.93 and the Nasdaq Composite .IXIC was up 4.77 points, or 0.09 percent, at 5,218.10.Eight of the 11 major S&P sectors were higher, with technology .SPLRCT rising the most by 0.47 percent. Microsoft (MSFT.O) was its biggest driver, rising 0.8 percent after Cowen & Co raised its price target.
McDonald's (MCD.N) fell 0.6 percent after the fast-food chain operator announced charges related to strategic changes it had outlined last year.HP Inc (HPQ.N) fell 2.9 percent after the company said it would cut about 3,000 to 4,000 jobs over the next three years. Advancing issues outnumbered decliners on the NYSE by 1,575 to 1,300. On the Nasdaq, 1,369 issues rose and 1,318 fell.The S&P 500 index showed three new 52-week highs and one new lows, while the Nasdaq recorded 21 new highs and 58 new lows. (Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Don Sebastian and Anil D'Silva)
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First Published On : Oct 14, 2016 23:00 IST