By Mark DeCambre and Sara Sjolin, MarketWatch

Workday rallies after earnings; Jackson Hole retreat in focus on Friday

U.S. stocks on Thursday struggled for direction, switching between small gains and losses, ahead of a key economic symposium in the Rocky Mountains, and as members of the Federal Reserve indicated that a rate hike soon may be warranted.

"When I look at where we are with the job market, when I look at inflation and our forecast for that, I think it is time to move," Kansas City Fed President Ester George said in an interview on Bloomberg Radio. In a separate Thursday morning interview on CNBC, she said hikes should be made gradually.

Later Thursday, Federal Reserve Bank of Dallas President Robert Kaplan said the case is strengthening for a rate hike in the not-so-distant future. He also called on lawmakers, during an interview on CNBC, to come up with fiscal policies that might boost the economy.

George is a voting member of the policy-setting Federal Open Market Committee, which is set to meet Sept. 20-21. Kaplan will be a voting member of the FOMC in 2017.

Chatter on monetary policy comes ahead of a highly anticipated retreat of economists and Fed members in Jackson Hole, Wyo., which will be headlined by Fed Chairwoman Janet Yellen.

Stocks, which had opened modestly lower, has been flirting with positive territory as crude-oil futures turned green.

The Dow Jones Industrial Average were trading flat at 18,469. Shares of Pfizer Inc., up 0.6%, led blue-chip gainers in early trade, while Apple Inc.'s stock, off 0.9%, led decliners. The S&P 500 index was near break-even at 2,174. Six of large-cap index's 10 sectors were in the green, topped by a rise in the materials sector.

Meanwhile, the Nasdaq Composite Index tried to bounce back from Wednesday's slide and was slightly higher, up 0.1% at 5,220.

Ultraloose monetary policy has been supportive of stocks' multiyear rise and investors have been worried that rate tightening might result in a stock-market drop.

Paul Nolte, portfolio manager at Kingsview Asset Manager, said investors are wrestling with the prospect of rate increases as much of the world is seeing anemic economic growth.

"Central banks around the world are throwing money out the window and we're going to be the lone wolf raising rates?" He said that dynamic "creates another whole set of issues with a strong dollar," which markets must contend with. A stronger dollar has been blamed for hurting earnings of multinational companies as they repatriate their sales in U.S. dollars.

Meanwhile, weekly jobless benefits claims fell to 261,000 (http://www.marketwatch.com/story/jobless-claims-dip-to-261000-layoffs-still-scarce-2016-08-25), showing that fewer Americans are losing their jobs as summer nears an end. Plus, U.S. durable-goods orders jumped 4.4% in July (http://www.marketwatch.com/story/us-durable-goods-orders-jump-44-in-july-2016-08-25). Nolte said that while job growth has been a bright spot in the U.S. economy, signs of stubbornly low inflation has remained the bugaboo for market participants.

Thursday's economic reports may be read as providing some fodder for a resumption of interest rate increases by the Fed, which has been stalled since its last hike in December.

Wavering trade comes after a downbeat session Wednesday, when the S&P 500 and the Dow industrials finished at their lowest levels since early August (http://www.marketwatch.com/story/us-stock-futures-search-for-firm-direction-marooned-in-wait-for-yellen-2016-08-24). The selloff came as health-care shares tumbled following outrage over a price hike for Mylan Inc.'s (MYL) EpiPens, which are widely used to treat anaphylactic shock.

Shares of Mylan were up 2.3% Thursday as the company said it would immediately aim to cut costs of its lifesaving medication (http://www.marketwatch.com/story/mylan-cuts-prices-for-epipens-after-pressure-from-congress-clinton-2016-08-25).

Read:How Hillary Clinton crushed another rally in biotech (http://www.marketwatch.com/story/how-hillary-clinton-crushed-another-rally-in-biotech-2016-08-24)

All eyes on Jackson Hole: Investors were looking to Jackson Hole and Yellen's comments to provide clarity on the path for rates. Yellen is set to speak at 10 a.m. Eastern Time, and markets are likely to remain becalmed until then, analysts said.

"Markets are incredibly quiet this August (in sharp contrast to last year), so investors are latching on to anything they can, which gives this meeting a lot more attention than it probably deserves," said Neil Wilson, markets analyst at ETX Capital, in a note.

Read:Existential threat looms over central bankers as they gather at Jackson Hole (http://www.marketwatch.com/story/central-bankers-face-irrelevance-at-jackson-hole-2016-08-24)

Read:Fed might raise interest rates despite market objections (http://www.marketwatch.com/story/fed-going-out-to-jackson-hole-to-get-divorce-from-markets-2016-08-23)

The ICE Dollar Index was flat on Thursday at 94.715, while gold traded down 0.5% at $1,323.60.

According to the CME FedWatch tool, markets are currently pricing in a 1-in-5 probability of a September rate increase.

Eight central bankers, including Fed governor Lael Brainard and New York Fed President William Dudley, are expected to meet activist group Campaign for Popular Democracy's Fed Up Campaign to answer questions about monetary policy (http://www.wsj.com/articles/fed-officials-to-meet-with-activists-ahead-of-jackson-hole-conference-1472069297) on Thursday.

Movers and shakers: Shares of Workday Inc.(WDAY) jumped 4.5% after the finance and human resources cloud company late Wednesday posted revenue ahead of forecasts (http://www.marketwatch.com/story/workday-shares-rise-as-second-quarter-revenue-tops-street-view-2016-08-24).

Shares in Guess Inc.(GES) soared 24% on the back of earnings out late Wednesday that beat expectations (http://www.marketwatch.com/story/guess-shares-spike-after-earnings-same-store-sales-beat-estimates-2016-08-24).

HP Inc.(HPQ) shares slumped 2.5%, even after the tech company reported better-than-expected earnings late Wednesday (http://www.marketwatch.com/story/hp-inc-falls-despite-earnings-beat-outlook-disappoints-2016-08-24).

Tiffany & Co.(TIF) rallied 5.3% after the high-end jewelry retailer beat fiscal second-quarter profit expectations (http://www.marketwatch.com/story/tiffanys-stock-boosted-by-profit-beat-2016-08-25).

Medtronic PLC(MDT) declined 1.8% lower after affirming its fiscal 2017 outlook.

Dollar General Corp.(DG) tanked 12% and Dollar Tree Inc.(DLTR) dropped 7.1% after both discount retailer reported disappointing earnings.

Other markets: Stocks in Asia closed mostly lower (http://www.marketwatch.com/story/asian-stocks-slump-as-investors-remain-cautious-2016-08-24) as investors there remained on the sidelines ahead of Yellen's speech.

European markets followed suit and dropped sharply (http://www.marketwatch.com/story/european-stocks-slide-after-surprise-drop-in-german-business-confidence-2016-08-25), with Germany's DAX 30 index among the biggest decliners after a disappointing reading on German business sentiment (http://www.marketwatch.com/story/germanys-ifo-index-falls-sharply-missing-views-2016-08-25).

Oil futures (http://www.marketwatch.com/story/oil-prices-waver-as-disappointing-us-inventory-data-fuel-oversupply-concerns-2016-08-25) turned positive, after sinking to a one-week low on Wednesday after disappointing U.S. inventory data.

 

(END) Dow Jones Newswires

August 25, 2016 11:06 ET (15:06 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.