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Wall Street slips after Jerome Powell sees strengthening economy

In his prepared remarks, Powell had hinted that the central bank would stick to its current path of gradual rate hikes

Jerome Powell

Federal Reserve Chairman Jerome Powell arrives to take the oath of office at the Federal Reserve in Washington

Wall Street's main indexes fell in choppy trading on Tuesday as U.S. bond yields rose after new Fed Chairman Jerome Powell said the economy was strengthening and that inflation would rise.
Following his comments, traders of U.S. short-term interest rate futures began pricing in a higher chance of a fourth rate hike this year, based on a Reuters analysis.
The benchmark U.S. 10-year Treasury yields rose to a session high of 2.914 percent.
"Pretty much the market is going to be fluttering back and forth in both directions based on things he says today, so it doesn't surprise me too much," said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin, Texas.
"It's his first speech and the market is already in a higher volatility phase."
In his prepared remarks, Powell had hinted that the central bank would stick to its current path of gradual rate hikes despite the added stimulus of tax cuts and government spending.
Powell's testimony comes at a sensitive time for the market, which has swayed wildly in recent weeks on inflation fears.
Stocks have recovered much of their losses from the early February sell-off, when they shed more than 10 percent.
At 11:21 a.m. ET, the Dow Jones Industrial Average was down 20.34 points, or 0.08 percent, at 25,688.93, the S&P 500 was down 7.08 points, or 0.254713 percent, at 2,772.52 and the Nasdaq Composite was down 28.97 points, or 0.39 percent, at 7,392.50. U.S. cable giant Comcast offered to buy Sky for $31 billion in an unsolicited approach, taking on Rupert Murdoch's Fox and Bob Iger's Walt Disney in the battle for Europe's biggest pay-TV group.
Comcast fell 5.2 percent, while Walt Disney dropped 3.1 percent and Twenty-First Century Fox 1.9 percent, dragging down the S&P consumer discretionary index.
In a big week for retail earnings, Macy's reported higher-than-expected same-store sales growth for the fourth quarter. Its shares jumped 11 percent.
Fitbit slumped more than 10 percent after the wearable device maker forecast current-quarter results below estimates.
Luxury builder Toll Brothers' shares rose 1.2 percent after it reported quarterly profit that beat analysts' estimates as it sold more homes at higher prices.
Advancing issues outnumbered decliners on the NYSE by 1,595 to 990. On the Nasdaq, 1,434 issues rose and 965 fell.

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First Published: Feb 27 2018 | 10:27 PM IST

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