US close: Stocks end on a mixed note in volatile trading

US stocks finished on a mixed note as Federal Reserve chair Janet Yellen signalled the possibility of an interest rate hike at next month’s meeting, alongside similar remarks from several other top US central bank officials in attendance at Jackson Hole, especially her number two, Fed vice chair Stanley Fischer.

The Dow Jones Industrial Average drifted lower by -0.29% to 18,395.50 points, the S&P 500 gave back 0.16% or 3.43 points to finish at 2,169.04 and the Nasdaq climbed 0.13% to 5,218.92 points.

Trading on Friday was volatile, with the stockmarket initially heading higher on the back of the Fed chief´s remarks and later falling back, although shares managed to clamber off their intra-session lows, with the Nasdaq rising for a ninth consecutive week.

Speaking at the Economic Symposium, Yellen said the case for an increase in the federal funds rate has strengthened in recent months in light of a robust labour market and an upbeat outlook on economic growth and inflation.

Her remarks were seen to suggest the Fed may raise rates at the 20-21 September policy meeting, or at least in the coming months.

However, Yellen stressed: “Our decisions always depend on the degree to which incoming data continues to confirm the (Fed’s) outlook.”

Speaking to CNBC after Yellen delivered her speech, Fischer said a hike in September and two hikes in 2016 were a possibility - depending on the data.

Fischer is considered to be a close ally of Yellen´s on the Fed board.

Craig Erlam, senior market analyst at Oanda, said: “The pre-prepared text from Yellen’s speech at Jackson Hole today didn’t necessarily offer much in the way of surprises but it did confirm one thing, there is now a clear and public hawkish consensus building within the Fed and Chair Yellen is on board.”

After a brief burst of weakness following Yellen’s remarks, the greenback climbed throughout the remainder of the session against most major currencies, with the spot US dollar index ending the day up by 0.84% to 95.57.

Oil prices slipped in response to the stronger dollar as it makes crude more expensive for holders of other currencies. West Texas Intermediate lost 1.04% to $47.15 per barrel on NYMEX.

The two-year Treasury note yield increased by five basis points to 0.84%, with Fed funds futures left pricing in roughly a 24% probability a Fed hike by December.

Earlier in the day, the second estimate of US economic growth in the second quarter was revised lower.

Gross domestic product expanded at an annualised 1.1% in the second quarter, the Commerce Department, slightly down from the initial estimate of 1.2%. but in line with analysts’ expectations.

Personal consumption in the US was revised to a 4.4% gain in the second quarter from a previous estimate of 4.2%. It marked the fastest rate of growth since the fourth quarter of 2014.

“Altogether, the second estimate of Q2 GDP does little to alter the view of economic activity in the second quarter.
Personal consumption rebounded sharply in the quarter as household spending on durable goods reversed its weak first-quarter showing,” said Barclays Research analyst Michael Gapen.

“Business investment remains soft, with structures investment continuing to reflect the lagged effects of declines in energy prices, and residential investment looks to have taken a breather after very strong growth throughout 2015. “

The US nominal trade deficit on goods narrowed to a seasonally adjusted $59.3bn in July from $64.5bn in June, the Commerce Department said separately (consensus: $63.5bn). Exports rose by $2.9bn during the month while imports shrank $2.4bn.

Another report showed US consumer sentiment eased in August. The University of Michigan’s final reading of the consumer sentiment index fell to 89.8 from 90.0 the month before and 91.9 in August last year. It was below the flash reading of 90.4.

In company news, Anheuser-Busch InBev NV gained even as it warned on Friday its beer merger with SABMiller could lead to thousands of job losses in the coming years.

Herbalife Ltd. slumped after reports billionaire investor Carl Icahn has recently been in talks to sell his stake in the nutritional-products company.

Elsewhere, software company Splunk, beauty products retailer Ulta Salon Cosmetics and video game retailer GameStop declined following disappointing earnings late on Thursday.

By sectors, the greatest weakness was seen in the most interest-rate sensitive corners of the market, with Platinum down 4.45%, multiutilities off 2.20% and utilities retreating 2.01%.

The KBW Philadelphia bank sector index meanwhile continued to push back towards its June 2016 highs.

S&P 500 - Risers
Autodesk Inc. (ADSK) $68.87 +8.12%
Seagate Technology Plc (STX) $33.33 +3.99%
E*TRADE Financial Corp. (ETFC) $26.05 +2.12%
Westrock Company (WRK) $48.05 +2.08%
Citizens Financial Group, Inc. (CFG) $24.12 +2.03%
Southwestern Energy Co. (SWN) $14.36 +1.92%
Micron Technology Inc. (MU) $16.51 +1.91%
Teradata Corp. (TDC) $32.29 +1.70%
Comerica Inc. (CMA) $46.85 +1.69%
Bank of America Corp. (BAC) $15.79 +1.67%

S&P 500 - Fallers
GameStop Corp. (GME) $28.74 -10.63%
Signet Jewelers Ltd (SIG) $80.65 -3.34%
Mosaic Company (MOS) $27.60 -3.16%
Darden Restaurants Inc. (DRI) $61.19 -2.87%
DTE Energy Co. (DTE) $92.59 -2.70%
SCANA Corp. (SCG) $70.57 -2.58%
Wisconsin Energy Corp. (WEC) $59.68 -2.56%
AutoZone Inc. (AZO) $753.47 -2.53%
American Electric Power Co. Inc. (AEP) $64.69 -2.53%
Public Service Enterprise Group Inc. (PEG) $42.47 -2.50%

Dow Jones I.A - Risers
Merck & Co. Inc. (MRK) $62.85 +0.85%
Intel Corp. (INTC) $35.26 +0.48%
Johnson & Johnson (JNJ) $119.04 +0.40%
Visa Inc. (V) $80.57 +0.31%
JP Morgan Chase & Co. (JPM) $66.22 +0.23%
Cisco Systems Inc. (CSCO) $31.35 +0.19%
Pfizer Inc. (PFE) $34.82 +0.14%
General Electric Co. (GE) $31.23 +0.06%
Goldman Sachs Group Inc. (GS) $165.97 +0.04%

Dow Jones I.A - Fallers
Verizon Communications Inc. (VZ) $52.07 -1.29%
McDonald's Corp. (MCD) $114.44 -0.86%
E.I. du Pont de Nemours and Co. (DD) $69.65 -0.84%
Coca-Cola Co. (KO) $43.32 -0.80%
Home Depot Inc. (HD) $134.36 -0.79%
Apple Inc. (AAPL) $106.94 -0.59%
Boeing Co. (BA) $132.23 -0.56%
Chevron Corp. (CVX) $101.32 -0.56%
Travelers Company Inc. (TRV) $117.14 -0.52%
Unitedhealth Group Inc. (UNH) $136.62 -0.50%

Nasdaq 100 - Risers
Autodesk Inc. (ADSK) $68.87 +8.12%
Seagate Technology Plc (STX) $33.33 +3.99%
Ctrip.Com International Ltd. Ads (CTRP) $47.44 +2.37%
Micron Technology Inc. (MU) $16.51 +1.91%
Check Point Software Technologies Ltd. (CHKP) $77.33 +1.83%
Illumina Inc. (ILMN) $172.21 +1.61%
Henry Schein Inc. (HSIC) $163.36 +1.58%
JD.com, Inc. (JD) $25.79 +1.46%
Akamai Technologies Inc. (AKAM) $55.31 +1.37%
Biomarin Pharmaceutical Inc. (BMRN) $96.22 +1.32%

Nasdaq 100 - Fallers
Ulta Salon, Cosmetics & Fragrance Inc. (ULTA) $254.85 -6.12%
O'Reilly Automotive Inc. (ORLY) $278.25 -2.08%
Bed Bath & Beyond Inc. (BBBY) $45.45 -1.96%
American Airlines Group (AAL) $36.23 -1.33%
Stericycle Inc. (SRCL) $83.65 -1.25%
Norwegian Cruise Line Holdings Ltd. - Ordinary Shares (NCLH) $35.80 -1.05%
Walgreens Boots Alliance, Inc. (WBA) $79.39 -0.99%
Dish Network Corp. (DISH) $48.84 -0.93%
Whole Foods Market Inc. (WFM) $30.73 -0.87%
Kraft Heinz Co. (KHC) $88.17 -0.82%