Stocks Close Slightly Lower Ahead Of Yellen Speech - U.S. Commentary

(RTTNews) - Stocks showed a lack of direction throughout much of the trading day on Thursday before eventually ending the day modestly lower. With the drop on the day, the major averages added to the losses posted in the previous session.

The major averages ended the day in negative territory but off their worst levels. The Dow dipped 33.07 points or 0.2 percent to 18,448.41, the Nasdaq edged down 5.49 points or 0.1 percent to 5,212.20 and the S&P 500 slipped 2.97 points or 0.1 percent to 2,172.47.

The lackluster performance seen for much of the session came as traders continued to look ahead to a speech by Federal Reserve Chair Janet Yellen on Friday.

Yellen is due to speak at the Kansas City Fed's monetary policy symposium in Jackson Hole, Wyoming, and traders will be looking for clues about the outlook for interest rates in her remarks.

However, analysts have noted the speech entitled "Designing Resilient Monetary Policy Frameworks for the Future" may focus more on the long-term.

"Traders are, as always, hoping to be able to decipher the path for U.S. monetary policy," said Accendo Markets analysts Mike van Dulken and Augustin Eden. "They may be left wanting. Again."

On the U.S. economic front, the Commerce Department released a report before the start of trading showing a stronger than expected rebound in durable goods orders in the month of July.

The Commerce Department said durable goods orders surged up by 4.4 percent in July after tumbling by a revised 4.2 percent in June.

Economists had expected orders to climb by about 3.7 percent compared to the 4.0 percent slump that had been reported for the previous month.

Excluding a jump in orders for transportation equipment, durable goods orders rose by 1.5 percent in July after edging down by 0.3 percent in June. Ex-transportation orders had been expected to tick up by 0.5 percent.

A separate report from the Labor Department unexpectedly showed another modest drop in initial jobless claims in the week ended August 20th.

The report said initial jobless claims edged down to 261,000, a decrease of 1,000 from the previous week's unrevised level of 262,000. Economists had expected claims to rise to 265,000.

Sector News

Many of the major sectors ended the day showing only modest moves, contributing to the lackluster close by the broader markets.

Biotechnology stocks showed a notable move to the downside, however, with the NYSE Arca Biotechnology Index slumping by 1.2 percent. With the drop, the index fell to its lowest closing level in a month.

Notable weakness was also visible among retail and trucking stocks, while gold stocks regained some ground following recent weakness.

Reflecting the strength in the gold sector, the NYSE Arca Gold Bugs Index climbed by 1 percent after ending the previous session at a nearly two-month closing low.

The rebound by gold stocks came despite a continued decrease by the price of the precious metal, as gold for December delivery fell $5.10 to $1,324.60 an ounce.

Other Markets

In overseas trading, stock markets across the Asia-Pacific closed mixed once again on Thursday. Japan's Nikkei 225 Index dipped by 0.3 percent, while Hong Kong's Hang Seng Index inched up by less than a tenth of a percent.

Meanwhile, the major European markets all moved to the downside on the day. While the U.K.'s FTSE 100 Index slipped by 0.3 percent, the French CAC 40 Index fell by 0.7 percent and the German DAX Index slumped by 0.9 percent.

In the bond market, treasuries fluctuated over the course of the session before closing moderately lower. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 1.8 basis points to 1.577 percent.

Looking Ahead

Trading on Friday is likely to be driven by reaction to Yellen's speech, which is liable to overshadow U.S. reports on second quarter GDP and consumer sentiment.

In earnings news, Autodesk (ADSK), GameStop (GME) and Splunk (SPLK) are releasing their quarterly results after the close of today's trading, while Big Lots (BIG) is due to report its results on Friday.