Wall Street began the week lower as investors awaited Tuesday's testimony of the US Federal Reserve's new chairman, Janet Yellen, to gauge the central bank's take on the recent weakness in employment data and the overall outlook for the US economy.
Yellen, who took the helm on February 1, will provide the Fed's semi-annual testimony to the House Financial Services Committee tomorrow and the Senate Banking Committee on Thursday.
The most recent monthly government employment data were disappointing, as the growth of payrolls was far short of expectations in both December and January.
While severe winter weather is partly, perhaps largely, to blame, improvement in the labour market was a key driver for US policy makers to start reducing their monthly bond purchases, announcing a downgrade of US$10 billion each after the most recent FOMC meetings in December and January respectively.
"Markets are just looking to Yellen's testimony this week-that's going to be the key event," Geoffrey Yu, senior currency strategist at UBS in London, told Bloomberg News. Markets may be on a "defensive tone because she's got to acknowledge some weak figures of late."
Overall, investors have remained optimistic about the US economic outlook, as well as for corporate profits.
In afternoon trading in New York, the Dow Jones Industrial Average fell 0.14 percent, while the Standard & Poor's 500 Index slipped 0.08 percent. The Nasdaq Composite Index added 0.31 percent.
The S&P 500 could reach 1,900 in the next quarter, money manager Laszlo Birinyi told Bloomberg. "We've had a little bit of a detour and the road isn't as smooth as it has been, but we still think the rally is intact," Birinyi said.
US Treasuries moved higher, pushing the yield on the 10-year bond 1 basis point lower to 2.67 percent.
Slides in shares of UnitedHealth, last 2.1 percent weaker, and those of Exxon Mobil, last 1.1 percent lower, led the decline in the Dow.
Shares of McDonald's also fell, last down 0.9 percent, as the company reported a decline in same-store sales for the third straight month citing "broad-based challenges including severe winter weather."
Meanwhile, shares Apple gained, last up 1.9 percent, after Carl Icahn dropped his call for the company to buy back US$50 billion of its shares.
In Europe, the Stoxx 600 Index finished the session with a gain of less than 0.1 percent from the previous close. France's CAC 40 rose 0.2 percent, while the UK's FTSE 100 added 0.3 percent. Germany's DAX slipped 0.1 percent.
Here, shares of L'Oreal, up 4.5 percent, helped boosted the market. Nestle was said to explore ways to reduce its 29 percent stake in the biggest cosmetics maker, Bloomberg News reported.
This article is tagged with the following keywords. Find out more about MyNBR Tags
- Labour admits two students in controversial intern scheme didn't have necessary visas
- Sky, TVNZ bosses spar over America’s Cup 2020 rights
- Superyacht bonanza likely in wake of America’s Cup win, marine industry says
- Regatta win strengthens Southern Spars’ grip on yacht market
- Tegel says the chicken pricing war is over
Most listened to
- Chapman Tripp partner Rachel Dunne says the NZX has failed in its goal to attract small sized issuers to the public markets
- Tegel CEO Phil Hand on pricing, an Australian launch and the outlook
- John Fellet and Kevin Kenrick offer differing accounts of the America's Cup 2017 rights battle, and look ahead to 2020
- NZ Marine executive director Peter Busfield says winning the Cup back could drawn in an extra 60 superyachts per year
- NBR Radio: best of the week ended June 23, with Grant Walker