On Friday, U.S. stocks fell off the open but were positioned to end the week higher following a three-day rally ignited by confidence that the fed will hold off from hiking interest rates in the near term. Investors have been in risk-on mode again, supported by the Fed’s decision to hold its ground 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, stated David Donabedian, chief investment officer of Atlantic Trust Private Wealth Management.
Fed Chair Janet Yellen commented on Wednesday that U.S. growth was looking stronger and rate hikes would be needed to keep the economy from overheating and boosting high inflation. But the central bank held the low-interest rate environment that has helped support the bull market for stocks.
The S&P 500 reported its best two-day performance in more than two months on Thursday. The U.S. central bank had signaled that it might hike rates before the year ends and interest rate futures were pricing in approximately a 60 percent probability 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 added.
At 9:36 a.m. ET (1336 GMT), the Dow Jones industrial average fell 23.63 points, or 0.13 percent, at 18,368.83, the S&P 500 declined 4.41 points, or 0.2 percent, at 2,172.77 and the Nasdaq Composite dropped 11.13 points, or 0.21 percent, at 5,328.40. Ten of the 11 major S&P sectors declined, with the technology index’s .SPLRCT 0.61 percent drop leading the decliners.
Oil prices were edged lower, following two sessions of strong increases, on worries ahead of a gathering of OPEC ministers next week in Algeria to discuss a solution for the global oversupply. Investors will also keep an eye on a amount 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 declined and 946 increased. The S&P 500 index displayed two new 52-week highs and no new lows, while the Nasdaq showed 19 new highs and five new lows.