US close: Stocks edge higher as Fed's Yellen flags March rate hike
Wall Street finished the last session of the week with slight gains even as Fed chair Janet Yellen and other top US central bank officials flagged the likelihood of another interest rate hike on 15 March, when the country´s rate-setters were next due to meet.
The Dow Jones Industrial Average finished 0.01% higher at 21,005.71, the S&P 500 edged up 0.05% to 2,383.12 and the Nasdaq was 0.16% stronger to 5,870.75.
Meanwhile, oil prices gained with West Texas Intermediate up 1.12% to $53.20 per barrel.
In remarks to the Executives' Club of Chicago, Yellen said "at our meeting later this month (March), 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."
According to Bloomberg data, her remarks saw Fed funds futures move to price in a 96.0% probability of a 25 basis point interest rate hike on 15 March, up from 40% the week before.
To take note of, following earlier gains the yield on both the two and 10-year US Treasury government bonds finished the day flat at 1.31% and 2.48%, respectively.
Speaking before her, both her number two Stanley Fischer and the president of the Federal Reserve bank of Richmond, Jeffrey Lacker, had already joined the chorus of Fed speakers who now appeared to back another hike.
On the data front, Markit's services purchasing managers’ index dropped from January’s 14-month high of 55.6 to 53.8 in February. This was the lowest reading in five months and below the long-run series average of 55.3.
The Institute for Supply Management’s non-manufacturing index rose to 57.6 in February from 56.5 the previous month, above the 56.5 consensus forecast. This was the highest reading since October 2015.
Craig Erlam, senior market analyst at Oanda, said: "The week has already been dominated by the US central bank, with a large number of Fed officials making public appearances ahead of the blackout period – which starts tomorrow – and voicing their support for a rate hike very soon. Investors may have been slow on the uptake to begin with but the last week really has driven home the coordinated message that not only is a rate hike imminent but that it could come at the meeting in two weeks."
In corporate news, Snap surged by another 10.66% following its debut on the New York Stock Exchange on Thursday, when it closed at $24.53 for a 40% rise on its issue price, valuing the company at around $28.4bn.
From a sector stand-point, the best performance was seen in the following industrial groups: Airlines (1.92%), Apparel (1.60%) and Electronic Office Equipment (1.50%).
Michael Hewson, chief markets analyst at CMC Markets, said: "Snap is likely to remain in focus after a solidly positive start to its first day of trading as a public company. The level of enthusiasm for a company that remains a long way from making a profit and has little in the way of assets remains surprising, but is indicative of a market looking for new areas to make a return, with the shares rising strongly for the second day in a row. The company now has a market cap larger than eBay, what can possibly go wrong?"
Caterpillar rose 0.81% after it said on Thursday that a raid by federal authorities was likely due to a tax issue.
Big Lots was up 3.79% after the company beat profit expectations but missed on revenue.
Dow Jones - Risers
Caterpillar Inc. (CAT) $95.12 0.81%
Merck & Co. Inc. (MRK) $66.58 0.76%
Goldman Sachs Group Inc. (GS) $252.89 0.73%
JP Morgan Chase & Co. (JPM) $92.80 0.72%
Apple Inc. (AAPL) $139.78 0.59%
Walt Disney Co. (DIS) $111.24 0.59%
Unitedhealth Group Inc. (UNH) $168.18 0.53%
Microsoft Corp. (MSFT) $64.25 0.37%
Visa Inc. (V) $88.79 0.29%
Verizon Communications Inc. (VZ) $50.08 0.22%
Dow Jones - Fallers
Nike Inc. (NKE) $56.68 -1.90%
Wal-Mart Stores Inc. (WMT) $70.00 -1.03%
Exxon Mobil Corp. (XOM) $82.43 -1.01%
Procter & Gamble Co. (PG) $90.50 -0.45%
Boeing Co. (BA) $182.18 -0.44%
Travelers Company Inc. (TRV) $124.10 -0.31%
United Technologies Corp. (UTX) $112.31 -0.31%
3M Co. (MMM) $189.31 -0.31%
Cisco Systems Inc. (CSCO) $34.29 -0.29%
American Express Co. (AXP) $79.88 -0.27%
S&P 500 - Risers
Tenet Healthcare Corp. (THC) $20.99 9.78%
Micron Technology Inc. (MU) $25.57 3.52%
United Continental Holdings Inc. (UAL) $75.58 3.15%
MetLife Inc. (MET) $54.83 2.62%
American Airlines Group (AAL) $46.82 2.41%
Fastenal Co. (FAST) $51.80 2.31%
TripAdvisor Inc. (TRIP) $41.74 2.25%
Southwest Airlines Co. (LUV) $58.86 2.24%
Universal Health Services Inc. (UHS) $125.58 2.24%
Frontier Communications Co. (FTR) $2.87 2.14%
S&P 500 - Fallers
Macy's Inc. (M) $31.77 -4.36%
Costco Wholesale Corp. (COST) $170.26 -4.34%
Perrigo Company plc (PRGO) $72.76 -3.71%
Kroger Co. (KR) $29.63 -3.39%
Urban Outfitters Inc. (URBN) $26.06 -3.23%
Diamond Offshore Drilling Inc. (DO) $16.63 -2.98%
Staples Inc. (SPLS) $8.99 -2.81%
Transocean Ltd. (RIG) $13.53 -2.66%
First Solar Inc. (FSLR) $34.61 -2.56%
Whole Foods Market Inc. (WFM) $29.70 -2.50%
Nasdaq 100 - Risers
Micron Technology Inc. (MU) $25.57 3.52%
Incyte Corp. (INCY) $136.91 3.09%
American Airlines Group (AAL) $46.82 2.41%
Fastenal Co. (FAST) $51.80 2.31%
TripAdvisor Inc. (TRIP) $41.74 2.25%
CSX Corp. (CSX) $49.48 1.89%
PACCAR Inc. (PCAR) $68.63 1.86%
Western Digital Corp. (WDC) $77.54 1.65%
T-Mobile Us, Inc. (TMUS) $63.56 1.63%
Alexion Pharmaceuticals Inc. (ALXN) $134.99 1.54%
Nasdaq 100 - Fallers
Costco Wholesale Corp. (COST) $170.26 -4.34%
Autodesk Inc. (ADSK) $85.32 -2.29%
Discovery Communications Inc. Class A (DISCA) $27.89 -2.11%
Norwegian Cruise Line Holdings Ltd. - Ordinary Shares (NCLH) $50.11 -1.71%
Discovery Communications Inc. Class C (DISCK) $27.20 -1.66%
Ross Stores Inc. (ROST) $67.07 -1.09%
Xilinx Inc. (XLNX) $58.74 -1.03%
Walgreens Boots Alliance, Inc. (WBA) $85.89 -0.98%
Marriott International - Class A (MAR) $86.79 -0.83%
Dollar Tree Inc (DLTR) $77.13 -0.78%