By Matt Jarzemsky
U.S. stocks edged mostly lower as investors weighed remarks by
Federal Reserve Chairwoman Janet Yellen and signs of escalating
tension in Ukraine.
The Dow Jones Industrial Average slid 19 points, or 0.1%, to
17021 in midday trading, recovering from a drop of as much as 55
points.
The S&P 500 slipped three points, or 0.1%, to 1990, after
closing at a record Thursday. The Nasdaq Composite Index gained six
points, or 0.1%, to 4539.
Stocks wavered in a tight range after a transcript of Ms.
Yellen's speech was released at 10 a.m. EDT. Investors are
examining her remarks for hints as to when the Fed might raise
interest rates, reversing an easy-money policy widely seen to have
added fuel to stocks' rally, traders said.
The timing of an eventual rise in rates, which could dull the
appeal of stocks' dividends versus bond yields, is among the
biggest questions facing market participants.
Meanwhile, bulls are pointing to the latest round of corporate
profits topping Wall Street's predictions and inflows of investor
cash into funds holding U.S. stocks this year, particularly
exchange-traded funds. U.S. stock funds, including ETFs, brought in
a net $7.12 billion in the week ended Wednesday, according to
Lipper.
"People have really taken Yellen as being not as dovish as
expected," said Nick Lawson, global co-head of macro products and
sales at Deutsche Bank AG. But he added, "the equity market is
resilient. Unless there was something super hawkish or going
against what she said before, there is a 'bid' " to buy stocks.
U.S. Treasury bonds, meanwhile, pulled back as analysts said the
comments disappointed bond investors who had expected Ms. Yellen to
highlight significant slack in the labor market. Selling in the
U.S. 10-year Treasury note pushed its yield up to 2.419%. Bond
yields move inversely to prices.
Ms. Yellen spoke at an annual Federal Reserve conference in
Jackson Hole, Wyo. Others due to speak include European Central
Bank President Mario Draghi, scheduled to appear at 2:30 EDT.
Meanwhile, simmering tension between Russia and Ukraine put
traders on edge. Ukraine said Russian trucks crossed into Ukrainian
rebel-held territory without being accompanied by the Red Cross in
violation of an agreement between the two countries. Russia said
the trucks were filled with humanitarian aid supplies.
Stocks briefly fell to session lows after the North Atlantic
Treaty Organization condemned the convoy's entry into Ukraine.
Despite the central-bank and geopolitical drama, traders said it
was a quiet day at the office. Stock-trading activity has been in
the summer doldrums this week, with Thursday showing the lowest
volume of any non-holiday session year-to-date.
"Low overall volumes have limited the ability for large
institutional orders to be filled, hence the flat market," said
J.T. Cacciabaudo, head of equity trading at brokerage firm Sterne
Agee.
Elsewhere in global markets, the Stoxx Europe 600 dropped
0.3%.
Gold futures gained 0.5% to $1,281.30 an ounce and crude-oil
futures slid 0.9% to $93.10 a barrel.
In corporate news, Dynegy jumped 8.6% after agreeing to a $6.25
billion purchase of coal and gas generation assets from Duke Energy
and Energy Capital Partners, a deal that would nearly double the
buyer's power generation capacity. Duke's shares edged down
0.4%.
Foot Locker added 3% after the company's quarterly earnings and
sales topped analysts' forecasts
Min Zeng contributed to this article.
Write to Matt Jarzemsky at matthew.jarzemsky@wsj.com