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Wall Street flat as investors look for clues on rates

Posted by: Admin | Posted on: August 30th, 2016 | 0 Comments

Wall Street was little changed on Tuesday morning as investors looked for catalysts to drive the markets while keeping one eye on clues for the timing of the next interest rate hike.

Federal Reserve Chair Janet Yellen painted a rosy picture of the U.S. economy at an economic symposium on Friday and said the case for a rate hike was strengthening, but gave little indication on when the central bank could move.

Fed Vice Chairman Stanley Fischer, in an interview with Bloomberg TV on Tuesday, said the U.S. job market is close to full strength and the pace of interest rate hikes will depend on how well the economy is doing.

Investors are awaiting a report on monthly payrolls data due on Friday to assess whether it supports the hawkish tone that Fed officials have taken.

“I think today is going to be flat to down a little bit, simply because of yesterday’s strong move,” said Brad McMillan, chief investment officer of Commonwealth Financial.

“Investors are going to need some time to digest that. It is a quiet week with a lot of people at the beach.”

The SP 500 and the Dow snapped a three-day losing streak on Monday, helped by a lift in financials and commodity stocks after strong consumer spending data pointed to a pickup in U.S. economic growth.

The dollar index .DXY rose 0.3 percent on Tuesday, continuing to trade at a more than two-week high on higher prospects of a rate increase.

At 9:48 a.m. ET, the Dow Jones industrial average .DJI was down 13.36 points, or 0.07 percent, at 18,489.63.

The SP 500 .SPX was down 0.62 points, or 0.03 percent, at 2,179.76, while the Nasdaq Composite .IXIC was up 1.66 points, or 0.03 percent, at 5,233.99.

Five of the 10 major SP 500 indexes were higher, led by a 0.56 percent rise in the energy sector .SPNY on the back of higher oil prices. [O/R]

Shares of Apple (AAPL.O) fell 0.5 percent to $106.32, after European Union antitrust regulators ordered the iPhone maker to pay $14.5 billion to the Irish government, ruling that a scheme to route profits through Ireland was illegal state aid.

The stock was the top drag on all three major U.S. stock indexes.

Hershey (HSY.N) dropped nearly 11.3 percent to $99.06 after Mondelez (MDLZ.O) announced on Monday it was no longer pursuing an acquisition. Hershey’s was the biggest percentage loser on the SP 500.

American Airlines (AAL.O) fell 1.7 percent after Scott Kirby, its No.2 executive, left the company to join rival United Continental (UAL.N). United’s shares jumped 4.2 percent to $48.91.

Advancing issues outnumbered decliners on the NYSE by 1,541 to 1,114. On the Nasdaq, 1,415 issues rose and 862 fell.

The SP 500 index showed 21 new 52-week highs and no new lows, while the Nasdaq recorded 58 new highs and two new lows.

(Reporting by Yashaswini Swamynathan in Bengaluru)

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