Stocks Close Nearly Flat As Traders Shrug Off Yellen Speech - U.S. Commentary

(RTTNews) - After trending higher over the past several sessions, stocks showed a lack of direction throughout the trading day on Friday before closing roughly flat. A muted reaction to a highly anticipated speech by Federal Reserve Chair Janet Yellen contributed to the lackluster performance.

The major averages eventually ended the session mixed. While the Nasdaq inched up 6.45 points or 0.1 percent to 4,538.55, the Dow dipped 38.27 points or 0.2 percent to 17,001.22 and the S&P 500 edged down 3.97 points or 0.2 percent to 1,988.40.

Despite the mixed performance on the day, the major averages all moved notably higher for the week. The Dow jumped by 2 percent, while the Nasdaq and the S&P 500 surged up by 1.6 percent and 1.7 percent, respectively.

The choppy trading on Wall Street came on the heels of Yellen's speech at the Kansas City Fed's economic policy symposium in Jackson Hole, Wyoming.

Yellen's remarks did not provide any meaningful hints about the outlook for interest rates and largely focused on the difficulty in judging the remaining degree of slack in the labor market.

The Fed chief concluded her remarks by acknowledging that the central bank could go either way with regard to interest rates.

While Yellen said an increase in rates could come sooner than expected if progress on inflation and the labor market occurs more rapidly than anticipated, she also said the future path of rates could be more accommodative if the economic performance turns out to be disappointing.

Peter Boockvar, managing director at the Lindsey Group, said, "Bottom line, the speech was an academic discussion that was a non-event in terms of gleaning any clues to when future policy moves, past the end of QE, will occur."

Meanwhile, traders also kept an eye on developments overseas amid news that Russia sent a humanitarian aid convoy into eastern Ukraine.

Ukraine has claimed that the move violates an agreement between the two countries and described the convoy as an invasion.

Among individual stocks, shares of Aeropostale (ARO) fell sharply on the day after the teen apparel retailer forecast a wider than expected third quarter loss.

Tax preparation software developer Intuit (INTU) also came under pressure after reporting a wider fourth quarter net loss and providing disappointing guidance.

On the other hand, shares of Salesforce.com (CRM) surged higher after the provider of customer relationship management software reported better than expected second quarter results and raised its full-year guidance

Apparel retailer Gap (GPS) also showed a strong move to the upside after reporting second quarter results that beat analyst estimates and raising its full-year earnings outlook.

Sector News

Most of the major sectors ended the day showing only modest moves, contributing to the nearly flat close by the broader markets.

While commercial real estate and energy stocks moved to the downside on the day, some strength was visible among electronic storage and internet stocks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance during trading on Friday. Japan's Nikkei 225 Index dipped by 0.3 percent, while Hong Kong's Hang Seng Index rose by 0.5 percent.

Meanwhile, the major European markets all moved to the downside on the day. While the U.K.'s FTSE 100 Index closed just below the unchanged line, the German DAX Index and the French CAC 40 Index dropped by 0.7 percent and 0.9 percent, respectively.

In the bond market, treasuries showed a lack of direction throughout the session before closing nearly flat. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by less than a basis point to 2.403 percent.

Looking Ahead

Next week's trading could be impacted by the release of a slew of key U.S. economic data, including reports on new home sales, durable goods orders, and personal income and spending.

On the earnings front, retailers Best Buy (BBY), Tiffany (TIF), Abercrombie & Fitch (ANF), Dollar General (DG), and Big Lots (BIG) are among the companies due to report their quarterly results next week.