US open: Stocks lower as investors mull prospective rate hike

US stocks traded lower on Monday as geopolitical concerns weighed on investors' minds, while they also continued to mull over a prospective rate hike by the Federal Reserve next week.

At 1545 GMT, the Dow Jones Industrial Average was down 0.4% at 20,922.49, the S&P 500 fell 0.59% to 2,369.12 and the Nasdaq was 0.69% weaker to 5,830.21.

Meanwhile, West Texas Intermediate was up 0.24% to $53.46 per barrel and Brent crude rose 0.46% to $56.16.

In currency markets, the dollar was up 0.34% against the pound to 0.8161 and was 0.17% higher versus the euro to 0.9429, but fell 0.24% against the yen a 113.77.

During a speech in Chicago on Friday, Fed chair Janet Yellen said: “We currently judge that it will be appropriate to gradually increase the federal funds rate if the economic data continue to come in about as we expect.

"Indeed, at our meeting later this month, the committee will evaluate whether employment and inflation are continuing to evolve in line with our expectations, in which case a further adjustment of the federal funds rate would likely be appropriate.”

Ipek Ozkardeskaya, senior market analyst at London Capital Group, said that Yellen left little to the imagination for an interest rate hike and “also hinted that there could be more tightening in 2017, meaning that the Fed could raise rates more than three times anticipated by the markets. The US 10-year yields are now ready to successfully test the 2.5%”.

Elsewhere, investors were digesting news that North Korea fired four missiles that fell into the Sea of Japan, with three falling in Japan’s exclusive economic zone, early on Monday morning, Seoul time.

In corporate news, shares of General Motors were down 2.41% after it said it will sell its European unit with the Opel and Vauxhall brands for $2.3bn to PSA Group.

US-listed shares in Deutsche Bank dropped 3% after it announced plans for a €8bn share sale to bolster its capital position.

Time Warner fell 0.4% after it was downgraded to ‘neutral’ from ‘buy’ by UBS, while Albemarle Corp was down 3.48% after Citi downgraded the chemical company to ‘neutral’ from ‘buy’.

Snap fell 5.43% following the surge in shares at its debut on the New York Stock Exchange last week.

On the data front, factory orders rose 1.2% in January, from 1.3% in December and more than the 1% expected.

Excluding transportation, factory orders increased 0.3%, while industrial machinery orders were up 6.6% and photographic equipment orders fell 15%.