Stocks were grinding towards a fifth straight higher close Tuesday as Wall Street brushes off Fed Chair Janet Yellen's assessment for higher U.S. interest rates in her semi-annual testimony to the Senate Banking Committee. The benchmark averages were fractionally higher with the Dow Jones Industrial Average setting another record high.
Wall Street wobbled at the open when Yellen warned that waiting too long to raise interest rates would be "unwise" and could force the Fed to raise rates rapidly, risking financial market disruption and "pushing the economy to recession." Treasury yields spiked, and the dollar added to its earlier gains against the yen and euro. Stocks regained their footing, putting the Dow Jones Industrial Average on track for a fourth record close.
Before the open, January data on inflationary pressures gave a brief lift to equities when wholesale prices showed a sizable increase from December. But year-over-year inflationary pressures remained tame, and the January figures were influenced by higher energy prices as well as the stronger dollar.
Leading into Yellen's testimony, Richmond Fed president Jeffrey Lacker said that "significantly higher rates are warranted" and that the Fed may have to raise interest rates sooner and "more briskly than markets now seem to expect." Lacker's remarks were eventually eclipsed by Yellen's testimony as Lacker is not a voting member of the Fed this year.
European indices squeezed out slim gains on Tuesday after being under pressure most of the day on below-consensus Euro-zone GDP and industrial production data. The UK's FTSE-100 surrendered earlier gains that resulted from selling pressure on sterling. The UK currency was lower against most of the major currencies on a miss on the consumer price index, dampening expectations for the Bank of England to raise interest rates.
Crude oil was up $0.37 to $53.30 per barrel. Natural gas was down $0.03 to $2.91 per 1 million BTU. Gold was up $0.10 to $1,225.90 an ounce, while silver was up $0.02 to $17.84 an ounce. Copper was down $0.05 to $2.73 per pound.
Among energy ETFs, the United States Oil Fund was up 0.80% to $11.42 with the United States Natural Gas Fund was down 0.68% to $7.32. Amongst precious-metal funds, the Market Vectors Gold Miners ETF was down 0.76% to 24.76 while SPDR Gold Shares were down 0.07% to $116.72. The iShares Silver Trust were up 0.09% to $16.91.
Here's where the markets stand at mid-day:
NYSE Composite Index was down $17.35 (-0.15%) to 11,416.58
Dow Jones Industrial Index was down 1.27 points (-0.01%) to 20,410.29
S&P 500 was down 1.29 points (-0.06%) to 2,326.96
Nasdaq Composite Index was down 4.74 points (-0.08%) to 5,759.40
FTSE 100 was down 4.20 points (-0.06%) to 7,274.72
DAX was up 0.46 points (-0.00%) to 11,774.89
CAC 40 was up 7.63 points (-0.16%) to 4,895.82
Nikkei 225 was down 220.17 points (-1.13%) to 19,238.98
Hang Seng Index was down 7.97 points (-0.03%) to 23,703.01
Shanghai China Composite Index was up 1.09 points (+0.03%) to 3,217.93
NYSE SECTOR INDICES
NYSE Energy Sector Index was down 68.73 points (-0.59%) to 11,142.55
NYSE Financial Sector Index was up 22.76 points (+0.31%) to 7,281.55
NYSE Healthcare Sector Index was down 26.58 points (-0.22%) to 12,352.34
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