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US: Wall Street flat ahead of Yellen testimony
[BENGALURU] US stocks were little changed on Tuesday, with the "Trump rally" pausing ahead of a testimony by Federal Reserve Chair Janet Yellen that will be scrutinised for clues on the timing of the next interest rate hike.
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.
Richmond Fed President Jeffrey Lacker said the central bank will likely have to raise rates more rapidly than the markets currently expect given that any new policies by the Trump administration, while uncertain, will force the Fed's hand.
The Fed in December projected three rate hikes this year. Currently, traders have priced in a mere 17 per cent chance of a rate move in March, despite a spate of strong economic data including a robust labor market and improving inflation.
Ms Yellen starts her testimony before the Senate Banking Committee at 1500 GMT.
"The market is pricing in good times ahead but the question is whether the administration is going to be able to deliver on the promises made," said Andre Bakhos, managing director at Janlyn Capital in Bernardsville, New Jersey.
"The world listens to what Yellen has to say and her speech does have a potential to create an interesting reality check."
At 1435 GMT the Dow Jones Industrial Average was down 2.72 points, or 0.01 per cent, at 20,409.44. The S&P 500 was down 1.57 points, or 0.06 per cent, at 2,326.68 and the Nasdaq Composite was down 8.88 points, or 0.15 per cent, at 5,755.08.
The S&P on Monday topped US$20 trillion for the first time ever, the culmination of a rally that started Thursday after Mr Trump vowed to make a major tax announcement soon.
Nine of the 11 major S&P sectors were lower on Tuesday, with technology and consumer staples weighing the most.
General Motors was the top gainer on the S&P, rising 3.8 per cent 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 3.3 per cent, while Ford gained 0.7 per cent.
Cynosure jumped 27.9 per cent to US$65.87 after Hologic said it would acquire the medical aesthetics company for US$1.65 billion. Hologic fell 2.6 per cent to US$38.89.
Declining issues outnumbered advancers on the NYSE by 1,499 to 1,049. On the Nasdaq, 1,393 issues fell and 805 advanced.
The S&P 500 index showed 14 new 52-week highs and no new lows, while the Nasdaq recorded 31 new highs and nine new lows.