US open: Dow and S&P relinquish gains as investors wait on Yellen

US stocks were flat on Wednesday as investors prepared for the second day of Federal Reserve Chair Janet Yellen’s testimony to US lawmakers on Capitol Hill.

Just after 09:30 in New York, the Dow Jones Industrial Average was down 0.08%, while the S&P 500 and the Nasdaq slipped 0.15% and 0.22%, respectively.

In Tuesday’s testimony, Yellen downplayed fears of early rates rises, staying away from hinting on possible interest rate hikes by saying the central bank will assess the conditions on a meeting-by-meeting basis.

“The Federal Open Market Committee is clearly more worried about tightening monetary policy too early rather than too late,” said CMC Markets analyst Jasper Lawler.

“There have been big improvements in the US labour market but inflation is still well below target and that gives the Fed the excuse it needs to stick with zero interest rate policy as long as possible.”

New US home sales sold at an annual rate of 481,000 in January, declining slightly from 482,000 in December but above expectations of a 470,000 reading.

Meanwhile, applications for US home mortgages fell for a third consecutive week in the week ended 20 February.

According to figures released by the Mortgage Bankers Association, the adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, fell 3.5% last week, reaching its lowest level since 2 January.

In company news, electronics retailer Target edged 0.71% higher despite reporting a pre-tax loss of $5.1bn, including an impairment charge, at its Canadian operations.

Department store chain Macy's advanced 0.39% despite posting a 2% rise in sales in the holiday shopping quarter, falling short of analysts' estimates.

First Solar climbed 4.15% after reporting late on Tuesday that its profit had almost tripled in the fourth quarter.

Tech giant Hewlett Packard posted first-quarter earnings of 92 cents per share, up 2% from a year ago, beating analysts' expectations but that did not stop shares from falling 8.29% after it warned that currency headwinds will weigh more than expected on earnings in the current quarter.

Animated film producer Dreamworks fell 4.26% after announcing late on Tuesday that it swung to a fourth quarter loss of $263.2m.

Gold futures advanced 0.68% to $1,205.50,while the dollar fell 0.2% and 0.06% against the pound and the euro respectively but gained 0.1% against the yen.

Having registered losses in the first two sessions of the week, oil prices rebounded slightly on Wednesday, with Brent crude rising 1.16% to $59.35 a barrel, while West Texas Intermediate advance 0.24% to $49.40 a barrel.