Markets ended mostly in the red on Friday as both US Fed chairwoman Janet Yellen and ECB President Mario Draghi's speeches at Jackson Hole, Wyo failed to encourage investors. Escalating tensions between Russia and Ukraine also dragged the benchmarks down. Markets also witnessed the year's lowest intraday composite traded volume for NYSE and Nasdaq.
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The Dow Jones Industrial Average (DJI) declined 0.2% to close at 17,001.22. The Standard & Poor 500 (S&P 500) also decreased 0.2% to close at 1,988.40. The tech-laden Nasdaq Composite Index closed at 4,538.55; rising 0.1%. The fear-gauge CBOE Volatility Index (VIX) declined 2.5% to settle at 11.47. A total of 4.1 billion shares were traded on Friday, lower than the five-day average of 5.1 billion. Decliners outpaced advancing stocks on the NYSE. For 60% stocks that declined, 36% advanced.
In her speech at Jackson Hole, Wyo, US Federal Reserve chairwoman Janet Yellen said the economy is approaching Fed's target of full employment and a stable inflation rate. She said that 19 labor market indicators indicated overall improvement in the labor market.
However, she also mentioned that there is no "simple recipe" that the Fed could follow to determine whether it was achieving its targets. She did not turn down the possibility of earlier-than-anticipated rate hike if labor market conditions continue to improve and the inflation rate increased more rapidly.
On the other hand, European Central Bank president Mario Draghi also failed to provide any clear picture about weak growth in the Eurozone. At Jackson Hole, Wyo, he said the ECB is looking to implement more flexible policies in order to combat the Eurozone's high unemployment rate. He also said fiscal policy should play a "greater role" in addition to monetary policy for economic growth. However, he blamed major economies for not implementing flexible fiscal policies. He believes that the ECB alone cannot tackle high unemployment prevailing in the Eurozone.
Reportedly, 100 Russian trucks carrying humanitarian aid have crossed the eastern border of Ukraine without the assistance of Red Cross. This sparked concerns about a Russian invasion of Ukraine. On Friday, Ukraine said Russia has initiated "direct invasion" in their territory in the name of humanitarian aid. Further, NATO Secretary General Anders Fogh Rasmussen blamed Russia for organizing an "alarming build-up" through this operation as thousands of Russian troops are waiting near the border. He also asked Moscow to "stop destabilizing Ukraine."
In company news, shares of Ross Stores Inc. ( ROST ) jumped 7.4% after posting second quarter earnings per share of $1.14, beating the Zacks Consensus Estimate of $1.09. Shares also rose 16% year over year. Earnings benefited from better-than-anticipated merchandise gross margins along with aggressive cost-control measures. Positive earnings from Ross Stores helped Consumer Discretionary Select Sector SPDR (XLY) to be the second biggest gainer among the S&P 500 sectors. The sector gained 0.2%.
The Gap, Inc. ( GPS ) reported second quarter adjusted earnings per share of 70 cents, increasing 9.4% year over year and coming in a cent higher than the Zacks Consensus Estimate. Shares of Gap climbed 5.2% on Friday.
Keurig Green Mountain, Inc.'s ( GMCR ) shares soared 13.3% after announcing that the company has signed a multi-year licensing deal with Kraft Foods Group, Inc. ( KRFT ). The former will manufacture and distribute Kraft's branded coffees in Keurig portion packs that are used in Keurig's commercial brewing systems. The gains in Keurig Green Mountain helped the Nasdaq to end in the green on Friday.
Shares of Dynegy Inc. ( DYN ) gained 8.8% after the energy company agreed to buy 12,500 megawatts of coal and natural gas generation capacity from Duke Energy ( DUK ) and Energy Capital Partners for around $6.25 billion. This move will almost double its present capacity to 26,000 MW.
However, the Energy Select Sector SPDR ETF (XLE) was the biggest loser among the S&P 500 sectors. The sector declined 0.7% on Friday. Key energy stocks from the sector such as Chevron Corporation ( CVX ), Schlumberger Limited ( SLB ), Chesapeake Energy Corporation ( CHK ) and EOG Resources, Inc. ( EOG ) declined 0.6%, 0.4%, 1.7% and 0.9%, respectively. Out of 10 S&P 500 sectors, 6 sectors registered losses on Friday.
Over the week, the Dow Jones Industrial Average (DJI), Standard & Poor 500 (S&P 500) and Nasdaq Composite Index rose 2%, 1.7% and 1.7%, respectively.
Encouraging economic data especially from the housing sector and upbeat earnings results helped the markets end in the green zone for the week. News of a deal between Dollar General Corporation ( DG ) and Family Dollar Stores Inc. ( FDO ) was also welcomed by investors. However, investors remained concerned about the sooner-than-expected interest rate hike over the week. The S&P hit an all-time high on Thursday.
Economic data came in positive throughout the week. Housing data, including reports on homebuilder confidence, existing home sales and building permits were encouraging. Separately, leading indicator index numbers also encouraged investors. Upbeat earnings from companies such as Home Depot, Inc. ( HD ), Target Corp. ( TGT ) and American Eagle Outfitters, Inc. ( AEO ) helped to improve investor sentiment. However, markets were affected after the Fed minutes suggested differing views among the Fed officials about hiking rates sooner than anticipated.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free reportROSS STORES (ROST): Free Stock Analysis ReportKEURIG GREEN MT (GMCR): Free Stock Analysis ReportKRAFT FOODS GRP (KRFT): Free Stock Analysis ReportGAP INC (GPS): Free Stock Analysis ReportDYNEGY INC-NEW (DYN): Free Stock Analysis ReportDUKE ENERGY CP (DUK): Free Stock Analysis ReportDOLLAR GENERAL (DG): Free Stock Analysis ReportFAMILY DOLLAR (FDO): Free Stock Analysis ReportHOME DEPOT (HD): Free Stock Analysis ReportTARGET CORP (TGT): Free Stock Analysis ReportAMER EAGLE OUTF (AEO): Free Stock Analysis ReportTo read this article on Zacks.com click here.