Yellen Fails to Lift Dow Jones Industrial Average

M&A Madness Strikes; Plus, Chinese Stocks Break Out

by Alex Eppstein

Published on May 22, 2015 at 4:19 PM

The Dow Jones Industrial Average (DJIA) was in the red most of the day, eventually settling on a loss -- and snapping its weekly win streak. By contrast, the S&P 500 Index (SPX) and Nasdaq Composite (COMP) mustered week-over-week gains. Capturing the attention of traders ahead of the holiday weekend was Fed Chair Janet Yellen's afternoon speech, in which she reiterated that a 2015 interest-rate hike is likely, albeit data-dependent. The Street also digested a slight uptick in the consumer price index (CPI), as well as a strengthening greenback.

 

Continue reading for more on today's market, including:

 

 

The Dow Jones Industrial Average (DJIA - 18,232.02) faded toward the end of the session, and finished on a 53.7-point, or 0.3%, loss. Twenty-four of the Dow's 30 components settled lower, led by Boeing Co's (NYSE:BA) 1.7% drop. Goldman Sachs Group Inc (NYSE:GS) paced the six blue-chip winners with a 1.4% gain. On a weekly basis, the DJIA dipped 0.2%, for its first weekly loss in three.

The S&P 500 Index (SPX - 2,126.06) lost 4.8 points, or 0.2%, but managed a 0.2% week-over-week advance. The Nasdaq Composite (COMP - 5,089.36) ended 1.4 points, or 0.03%, below the flatline, but up 0.8% relative to last Friday's close.

The CBOE Volatility Index (VIX - 12.13) edged 0.02-point, or 0.2%, higher. However, on a weekly basis, the market's "fear gauge" slipped 2%.

 

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5 Items on Our Radar Today:

 

  1. Fed Chair Janet Yellen said the central bank will likely lift interest rates this year, explaining that pushing back the hike any further could risk "overheating the economy." However, she conceded that the recent slowdown in growth is concerning, and said "we are not there yet," with respect to the state of the economy. (CNNMoney)
  2. Consumer prices edged just 0.1% higher from March to April, according to the Labor Department. Nevertheless, the figure, which was impacted by weaker gasoline prices, was more-or-less in-line with expectations. The core CPI -- which excludes food and energy -- jumped 0.3%, marking the biggest gain in more than two years. (CNBC)
  3. Quest Diagnostics Inc (NYSE:DGX) jumped to a record peak amid buyout buzz of its own.
  4. Calls flew off the shelves on this Taiwan-based semiconductor maker.
  5. Lackluster earnings and guidance, as well as negative analyst attention, weighed heavily on this retail stock.

 

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Commodities:

 

Crude pared a portion of Thursday's gains, pressured by a global supply glut, a stronger dollar, and profit-taking. By day's end, July-dated crude was down $1, or 1.6%, to settle at $59.72 per barrel. However, comparing most-active contracts, liquid gold gained 3 cents relative to last Friday's close to pull off its 10th consecutive weekly win.

 

A stronger dollar and fears of a Fed rate hike weighed on gold, which gave back 10 cents to close at $1,204 per ounce. Week-over-week, the malleable metal shed 1.7% -- its worst weekly performance in a month.



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