Wall Street opens lower after three-day rally

 

US stock indexes opened lower on Friday but were poised to end the week higher after a three-day rally spurred by optimism that the Federal Reserve will hold off from raising interest rates in the near term.

Twitter shares jumped 15.7 per cent to $21.55 after CNBC reported the microblogger is moving closer to a sale and that suitors include Alphabet's Google and Salesforce.com.

Investors have been in risk-on mode again, encouraged by the Fed's decision to stand pat on rates at a meeting this week.

"There is some consolidation after the very active and positive week for stocks based on news flow from the central banks," said David Donabedian, chief investment officer of Atlantic Trust Private Wealth Management.

Fed Chair Janet Yellen said on Wednesday that US growth was looking stronger and rate increases would be needed to keep the economy from overheating and fueling high inflation. But the central bank maintained the low-interest rate environment that has helped underpin the bull market for stocks.

The S&P 500 index notched its best two-day performance in more than two months on Thursday.

The US central bank had hinted that it might raise rates before the year ends and interest rate futures were pricing in roughly a 60 per cent chance of a rate increase by December.

"Barring any major changes in economic data or market volatility, we think a December rate hike is on the cards. The underlying message from the Fed this week was that they want to raise rates," Donabedian said.

At 9:36 am ET (13:36 GMT), the Dow Jones industrial average was down 23.63 points, or 0.13 per cent, at 18,368.83, the S&P 500 was down 4.41 points, or 0.2 per cent, at 2,172.77 and the Nasdaq Composite was down 11.13 points, or 0.21 per cent, at 5,328.40.

Ten of the 11 major S&P sectors were lower, with the technology index's 0.61 per cent fall leading the decliners.

Facebook was down 1.5 per cent at $128.11 after the WSJ reported the social media giant overestimated viewing time for video ads by 60-80 per cent for two years.

Yahoo was down 1.6 per cent at $43.44, a day after the company said at least 500 million of its accounts were hacked in 2014 in a theft that appeared to be the world's biggest known cyber breach.

Salesforce was down 3.5 per cent at $71.95 and Alphabet was down 0.2 per cent at $813.90.

Oil prices were slightly lower, following two sessions of strong rises, on caution ahead of a gathering of Opec ministers next week in Algeria to discuss possible production cooperation to rein in global oversupply.

Investors will also keep an eye on a number of Fed speakers who are scheduled to speak at different events for further clues regarding the timing of the next rate hike.

Declining issues outnumbered advancing ones on the NYSE by 1,580 to 1,016. On the Nasdaq, 1,232 issues fell and 946 advanced.

The S&P 500 index showed two new 52-week highs and no new lows, while the Nasdaq recorded 19 new highs and five new lows.