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US: Stocks little changed as Yellen sees rate rise this year
[NEW YORK] US stocks were little changed as Federal Reserve Chair Janet Yellen signalled the central bank remains on track to raise interest rates this year.
The Standard & Poor's 500 Index slipped 0.1 per cent to 2,107.72 at 9:32 am in New York, after the benchmark posted its longest winning streak since January.
"A rate hike has been baked into prices for some time already," said Bruce Bittles, chief investment strategist at Milwaukee-based Robert W Baird & Co, which oversees US$110 billion. "There's going to be more to Yellen's decision-making than just the labour markets. Going forward, earnings will be important, particularly for a market that's richly valued."
A strengthening US economy and waning risks from Greece and China are keeping the Fed on track for a rate increase this year. Ms Yellen, in testimony prepared for delivery on Wednesday before the House Financial Services Committee in Washington, again emphasized that the timing of the first rate rise is less important than the subsequent path of increases, which she said would be gradual.
Data on Wednesday showed wholesale prices in the US climbed more than forecast in June as the cost of fuel picked up. The 0.4 per cent increase in the producer-price index followed a 0.5 per cent gain in May, according to Labour Department figures. Costs declined 0.7 per cent over the past 12 months. A separate report showed factory output in the US was little changed in June for a second month, held back by a decline in motor vehicle production.
The S&P 500 fell as much as 4 per cent from its all-time high, and has since recovered to trade within 1 per cent of its record set in May as the Greek crisis neared a resolution and China shares stabilized. The benchmark gauge and the Dow rose at least 3 per cent over the previous four sessions.
In Greece, the parliament votes Wednesday on a package of reforms aimed at getting more aid. Prime Minister Alexis Tsipras is trying to drum up support for the agreement that's sparked a revolt in his own party. Complicating matters is the International Monetary Fund's claim that Greece needs debt relief "far beyond" what European creditors have been willing to consider, including possibly deep haircuts on its debt.
Netflix Inc and Intel Corp are among eight S&P 500 companies reporting quarterly results on Wednesday. Analysts project earnings for members of the gauge dropped 6.4 per cent in the second quarter.