The Standard & Poor’s 500 Index closed little changed, with the benchmark declining for a second straight week as biotechnology stocks tumbled toward a bear market, thwarting a rally led by Nike Inc.
The Standard & Poor’s 500 Index fell less than 0.1 percent to 1,931.51 at 4 p.m. in New York, after earlier rising as much as 1.1 percent. The Nasdaq Composite Index lost 1 percent, erasing a 1.1 percent climb, while the Dow Jones Industrial Average gained 0.7 percent, supported by Nike’s gains.
Equities were initially boosted after Federal Reserve Chair Janet Yellen said in a speech following the close of markets yesterday that the central bank is on course to raise interest rates this year. Yellen’s remarks bolstered confidence the economy is sturdy enough to handle higher borrowing costs. She acknowledged that economic “surprises” could lead policy makers to change that plan.
The Fed held its fire on a rate increase last Thursday, saying it’s considering spillover risks to the U.S. economy from turmoil in global markets. That sparked declines in U.S. equities in five out of six sessions prior to Yellen’s speech. The selloff was briefly interrupted on Monday when Fed officials said a 2015 increase is still warranted. Traders are split on whether it will happen, pricing in about a 44 percent chance of a hike in December and a roughly 52 percent probability of liftoff in January.
Further calming some of investors’ worries about the impact of an emerging-market downturn, data today showed the world’s largest economy expanded more than previously forecast in the second quarter. Growth was boosted by gains in consumer spending and construction. A separate report showed a final measure of consumer sentiment for September fell less than forecast, though it reached the lowest level in almost a year.
Source : Bloomberg