US stocks ended lower on Friday

Investors worry about when will the Federal Reserve raise interest rates

U.S. stocks finished lower on Friday, 19 August 2016 as investors worried about whether the Federal Reserve will raise interest rates sooner rather than later. The major averages ended a flat week on a similar note as early selling gave way to a partial rebound in afternoon action. Few catalysts and the expiration of August options contracts contributed to fairly lackluster moves during a week that has offered little guidance for investors about the Fed's policy plans, following the release on Wednesday of minutes from the central bank's July meeting.

The Dow Jones Industrial Average closed off 45.13 points, or 0.2%, to 18,552.57. S&P 500 gave up 3.15 points, or 0.1%, to finish at 2,183.87. The Nasdaq Composite Index lost 1.77 point, or less than 0.1%, at 5,238.38.

Equity indices began the day under moderate selling pressure as investors adjusted U.S. rate hike expectations and responded to a downturn in European markets. European bourses tilted to the downside as weakness in Italian banking names weighed on regional indices. Additionally, reports indicated that U.K. Prime Minister Theresa May hopes to invoke Article 50 of the Lisbon Treaty by April 2017. The move would begin formal talks for the country's withdrawal from the European Union.

Dow was pressured by a 2% decline in shares of Wal-Mart Stores.

The broader market marched off that level through the afternoon as heavily-weighted industrials, consumer discretionary and technology sector helped lead the rebound effort. Seven sectors ended in the red with defensively-oriented telecom services and utilities rounding out the leaderboard.

Friday's moves followed comments from San Francisco Fed President John Williams, who said late Thursday, that he would like to see another rate increase sooner rather than later, suggesting he is in the camp of central-bank officials who would like a rate increase as soon as September. Earlier this week, New York Fed President William Dudley also hinted a September rate increase was possible, while Atlanta Fed boss, Dennis Lockhart, talked about at least one more increase this year. Minutes from the Fed's July meeting released Wednesday, however, showed an almost even split between supporters of another rate increase in the near-term and others who would wait for more confidence that inflation was stirring.

The influential technology space ended near the front of the pack as top-weighted Apple outperformed. The Dow component erased a 0.7% decline, ending higher by 0.3%. The early selling followed reports of a string of insider sales. Chipmakers led in the sector as Applied Materials jumped 7.1%. The semiconductor name topped bottom-line estimates for the quarter and raised its fourth-quarter outlook above consensus.

On the energy front, September West Texas Intermediate crude added 30 cents, or 0.6%, to settle at $48.52 a barrel on the New York Mercantile Exchange. For the week, prices finished roughly 9.1%, and re-entered bull-market territory.

The U.S. Dollar Index ended off its session high as the greenback gained against the yen, euro, and pound. The dollar/yen pair ended higher by 0.3% while the single currency declined 0.2% against the buck.

The Treasury complex settled off session lows while yields gained across the curve. The yield on the 2-yr note rose five basis points (0.75%) while the yield on the 10-yr note ended at 1.58% (+4 bps).

Today's participation was above the recent average as more than 824 million shares changed hands at the NYSE floor.

There was no economic data of note released on Friday and investors will not receive any economic data on Monday.

Powered by Capital Market - Live News