By Anora Mahmudova and Barbara Kollmeyer, MarketWatch
Hewlett-Packard skids 9% after earnings miss
NEW YORK (MarketWatch) -- U.S. stocks were little-changed
Wednesday, with the main indexes hovering near record levels
achieved during the previous session, as investors heard more of
the same arguments from the testimony by Federal Reserve Chairwoman
Janet Yellen.
Chairwoman Yellen answered questions from members of Congress
for the second day and continued to stress that normalization of
interest rates will begin when the committee is confident that
inflation is on track to hit the central bank's inflation target of
2% growth.
The S&P 500 (SPX) was flat with six of the 10 main sectors
trading lower. Utilities were leading the losses, while consumer
discretionary stocks rose. The Dow Jones Industrial Average (DJI)
switched between small gains and losses. More than half of the 30
members of the blue-chip index were trading higher. The Nasdaq
Composite (RIXF) inched higher weighed down by losses in tech
stocks.
Hewlett-Packard (HPQ) was weighing down the tech index, with
shares off nearly 9%. The company said first-quarter revenue
(http://www.marketwatch.com/story/comcast-h-p-macys-first-solar-earnings-in-focus-2015-02-24)
fell short of Wall Street's expectations and it also cut its 2015
outlook to adjust for a stronger dollar.
Read more: What's changed since the last time the Nasdaq was at
5,000?
(http://www.marketwatch.com/story/six-differences-between-now-and-last-time-nasdaq-was-at-5000-2015-02-24)
Read more: Yellen prepares markets for a less-patient Fed
(http://www.marketwatch.com/story/yellen-prepares-markets-for-less-patient-fed-2015-02-24)
Bruce Bittles, chief investment strategist at RW Baird & Co,
said Janet Yellen has provided more of the same regarding Fed
policy.
"There was nothing new and investors know that the Fed will not
want to lose its credibility by raising rates too soon, only to cut
them back again. We believe they will stay market-friendly for
longer," Bittles said.
He cautioned about overly bullish sentiment in the market, which
is usually associated with diminishing liquidity.
"After hating this market for six years, investors are finally
getting in. The latest survey points that the bullishness is close
to extreme levels. When optimism is very high, it means that
investors are fully invested and do not have any more money left to
put into stocks, leading to big corrections. We are watching
optimism levels very closely," he added.
"So far the S&P 500's action has lock-stepped with the
comments in these [Yellen's] missives in that the market's internal
energy is being released on the upside. Surprisingly, given the
two-week rally, there is still plenty of internal energy available
to push prices higher," said Jeffrey Saut, chief investment
strategist at Raymond James in a note to investors.
Retailers in focus:Chesapeake Energy Corp.(CHK) shares slid 11%
after a profit miss, making the it the biggest decliner on the
S&P 500.
Late Tuesday, First Solar Inc.(FSLR) reported that its profit
nearly tripled in the fourth quarter. Shares, which climbed 10% on
Tuesday on deal news, were up more than 4%.
Dollar Tree(DLTR) and Salesforce.com Inc.(CRM) are also due to
report.
Read more: Target, Dollar Tree, Salesforce.com earnings in focus
(http://www.marketwatch.com/story/target-dollar-tree-salesforcecom-earnings-in-focus-2015-02-25)
Shares of Southwest Airlines Co.(LUV) fell slightly after the
company said it pulled 125 jets out of service Tuesday
(http://www.marketwatch.com/story/southwest-pulls-more-than-125-jets-out-of-service-over-missed-inspections-2015-02-25)
-- roughly one-fifth of its fleet -- over missed inspections.
Consumer Reports
(http://www.marketwatch.com/story/the-just-in-the-press-adores-tesla-2015-02-24)
named Tesla Motors Inc'.s(TSLA) Model S the top pick in 2015 for
car buyers. Shares rose 1%.
Also read: Apple shares may be ripe for a correction
(http://www.marketwatch.com/story/apple-ripe-for-a-correction-2015-02-24)
Other markets: The view of a dovish Federal Reserve helped push
gold prices
(http://www.marketwatch.com/story/gold-retakes-1200-on-tailwinds-from-yellen-and-china-data-2015-02-25)(GCH5)
past $1,200 an ounce. The dollar
(http://www.marketwatch.com/story/dollar-pulls-back-versus-yen-after-yellen-testimony-2015-02-25)(DXY)
moved lower across major crosses, while WTI oil prices
(http://www.marketwatch.com/story/oil-futures-keep-a-wary-eye-out-for-us-inventory-data-2015-02-25)(CLJ5)
were little changed ahead of U.S. inventory data due later.
European stocks also pulled back, taking a breather from their
own record run on Tuesday. The Stoxx Europe 600 saw its highest
close since October 2007. Hong Kong shares got a small lift
(http://www.marketwatch.com/storyno-meta-for-guid) after an initial
reading of China's manufacturing activity surprised to the
upside.
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