US stocks swing as Yellen speech draws near

New York / Bloomberg

U.S. stocks fluctuated amid a batch earnings after erasing an early decline, while investors awaited clues on the path of interest-rate increases before a speech by Federal Reserve Chair Janet Yellen on Friday.
HP Inc. sank 4.9 percent after forecasting earnings that may miss analyst projections. Signet Jewelers Ltd. dropped 14 percent as its profit fell short of estimates, while retailer Dollar General Corp. lost 13 percent after reporting comparable sales that trailed forecasts. Tiffany & Co. rose 7.1 percent after posting earnings that topped projections.
The S&P 500 Index fell less than 0.1 percent to 2,175.35 at 10:06 a.m. in New York, after losing 0.5 percent on Wednesday to halt a five-day streak of moves of 0.2 percent or less. The Dow Jones Industrial Average added 2.26 points to 18,483.74. The Nasdaq Composite Index was little changed.
“You know that Janet Yellen is going to come out and say something, and you have no idea what that’s going to be,” said Ben Kumar, an investment manager at Seven Investment Management LLP in London. His firm manages 10 billion pounds ($13 billion). “Your sensible move would be to be a bit nervous. So there seems to be some sensible profit taking, or moving to cash, or just sitting on the sidelines.”
The rally that drove the S&P 500 to a series of fresh records since early July has lost momentum amid hawkish remarks from Fed officials and uneven economic data. Pharmaceutical companies led declines yesterday after comments by Clinton renewed concern about potential changes in drug pricing. The S&P 500 fell the most in a week, trimming its monthly advance to less than 0.1 percent. That’s after the gauge rallied as much as 9.5 percent following a brief selloff sparked by the U.K. vote to quit the European Union.
The S&P 500 has held within a roughly 30-point range for three weeks, with Wednesday’s slide interrupting a period of tranquility that has the CBOE Volatility Index on track for its calmest August since 1994. The measure of market turbulence known as the VIX jumped 8.6 percent yesterday, its steepest since the June Brexit vote, and enough to send it toward the biggest monthly gain in a year.
Investors are keeping an eye out for signs of strengthening U.S. growth before Yellen’s speech. A report today showed orders for business equipment in July climbed the most since January, indicating U.S. companies are becoming less reluctant to invest. Separately, the number of Americans filing applications for unemployment benefits fell to the lowest level in five weeks, another sign of endurance in the labour market.