HPQ HP Inc

By Riva Gold 

Stocks drifted lower while the dollar steadied Thursday, with market attention focused on the Federal Reserve's annual Jackson Hole meeting.

Chairwoman Janet Yellen is set to give a speech at the central bankers' conference on Friday. While little direction on interest rates is expected, investors will be watching for any clues on the course of monetary policy or her assessment of the U.S. economy.

Stocks and the dollar have been locked in a narrow range ahead of the conference, with little else on the earnings or economic calendar to steer direction. Investors are roughly evenly divided on whether the Fed will raise rates in December, but few are expecting a move at the bank's September meeting.

Futures pointed to a 0.2% opening loss for the S&P 500, following modest declines in Europe and Asia.

Shares of HP Inc. were down 5.8% in premarket trading after the company offered a forecast for the current quarter below market expectations, while Dollar General Corporation shed 9.5% and Dollar Tree Inc. lost 6.8%.

Stocks also caught a downdraft from Europe, where the Stoxx Europe 600 was down 0.8%, led lower by shares of pharmaceutical companies.

Health-care shares retreated after political pressure to tamp down drug prices pushed biotechnology stocks lower Wednesday on Wall Street. Democratic presidential candidate Hillary Clinton had issued a statement calling EpiPen price increases "outrageous," sparking a modest selloff.

Mylan NV responded Thursday to backlash over price increases for its EpiPen emergency allergy treatment by promising to reduce the costs that some patients pay, though the drugmaker stopped short of saying it would roll back prices or limit future increases. Shares were up 3.4% premarket.

Adding to the downbeat tone in Europe, Germany's Ifo index, a key indicator of the economy, fell sharply in August, disappointing expectations for a slight increase.

"Given the relatively large downside surprise in the business climate index, we presume that first negative signs of the U.K.'s decision to leave the European Union are feeding through to the German industry," strategists at Barclays wrote in a note.

Trading in Asia was mostly softer. Shares in Shanghai were down 0.6%, even as China's central bank put more cash into the system through 14-day reverse repurchase agreements, which are effectively loans to commercial banks.

Australia's S&P ASX 200 fell 0.4% following recent declines in commodities prices.

Brent crude oil was last flat at $49.04 a barrel after dropping for three of the past four sessions. Gold was down 0.5% at $1,322 an ounce.

Despite Wednesday's pullback, both the Dow industrials and the S&P 500 remain within 1% of their all-time highs reached last week. Some investors continue to question the rally.

"You can hardly see how you can move up from here," said Fabrice Theveneau, head of global equities at Lyxor Asset Management. While profits so far have been better than feared, companies could come under pressure as wages rise, and the U.S. election could be a source of market turbulence in the fall, he said.

Shen Hong and Austen Hufford contributed to this article.

Write to Riva Gold at riva.gold@wsj.com

(END) Dow Jones Newswires

August 25, 2016 09:10 ET (13:10 GMT)

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