By Sue Chang and Mark DeCambre, MarketWatch

Health care sector leads the decline

U.S. stocks ended slightly lower Thursday, with investors reluctant to make big bets the day before a much-anticipated speech by Federal Reserve Chairwoman Janet Yellen that will be picked apart for clues to the central bank's next rate move.

The Dow Jones Industrial Average slid 33.07 points, or 0.2%, to close at 18,448.41. Shares of Cisco Systems(CSCO) rose 0.7% to lead blue-chip gainers, while Wal-Mart Stores Inc(WMT) sank 1.4% to drag on the blue-chip index.

The S&P 500 index fell 2.97 points, or 0.1%, to close at 2,172.47, with the health-care sector leading the decline, while the Nasdaq Composite Index shed 5.49 points, or 0.1%, to end at 5,212.20.

Mark Kepner, managing director of sales and trading at Themis Trading, said the market was gripped in a state of suspended animation, with trading volume weak and investors sidelined to await news out of Jackson Hole, Wyo., where Yellen will be headlining the Kansas City Fed's annual symposium. Yellen is scheduled to speak at 10 a.m. Eastern on Friday.

Read:Inside the Fed's Jackson Hole retreat (http://www.marketwatch.com/story/inside-the-feds-jackson-hole-retreat-2016-08-25)

"I don't think people want to trade without knowing what Yellen will say tomorrow," said Kepner, who believes there is "no harm" in the Fed waiting until December to tighten monetary policy.

Kansas City Fed President Esther George, in an interview with Bloomberg Radio, reiterated her desire for the central bank to raise rates right away (http://www.marketwatch.com/story/feds-george-says-its-time-for-raising-interest-rates-2016-08-25).

"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," George said. In a separate interview with CNBC, she said hikes should be made gradually.

George is a voting member of the policy-setting Federal Open Market Committee, which is set to meet Sept. 20-21. George, in a lone dissent, called for a rate rise at the Fed's July policy meeting. Kaplan will be a voting member of the FOMC in 2017.

Later Thursday, Dallas Fed President Robert Kaplan said the case is strengthening (http://www.marketwatch.com/story/feds-kaplan-says-case-is-strengthening-for-second-interest-rate-hike-2016-08-25) for a rate increase 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. Kaplan will be a voting member of the FOMC in 2017.

Analysts at BNP Paribas expect Yellen to "carry the torch" and set the tone for a possible rate increase as early as next month as FOMC members become increasingly hawkish in their rhetoric.

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

Paul Nolte, portfolio manager at Kingsview Asset Management, 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. A stronger buck has been blamed for hurting earnings of multinational companies as they repatriate their sales in U.S. dollars.

Economic news: The Kansas City Fed's manufacturing composite index edged up to negative 4 from negative 6 in July. A reading below zero indicates contraction in the sector.

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. 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.

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, while gold traded lower.

Movers and shakers: Shares of Mylan NV(MYL) extended losses to fall 0.7% in the wake of public outrage over the company's move to hike the price of EpiPen, a lifesaving medication which is widely used to treat anaphylactic shock.

Shares of Workday Inc.(WDAY) jumped 7.1% 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 22% 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).

Williams-Sonoma Inc.(WSM) rose 1.9% after its quarterly results met analysts' expectations despite issuing a weak outlook (http://www.marketwatch.com/story/williams-sonoma-shares-slide-on-disappointing-outlook-2016-08-24).

Tiffany & Co.(TIF) rallied 6.4% 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).

Signet Jewelers Ltd. (SIG) tumbled 13% after the jeweler reported that second-quarter sales dropped (http://www.marketwatch.com/story/signet-jewelers-tiffany-co-report-sales-drops-2016-08-25).

Medtronic PLC(MDT) declined 1.5% lower after affirming its fiscal 2017 outlook.

Dollar General Corp.(DG) tanked 18% and Dollar Tree Inc.(DLTR) dropped nearly 10% after both discount retailer reported disappointing earnings.

St. Jude Medical Inc.(STJ) slumped 5% after short selling firm Muddy Waters Capital said it was betting against the cardiovascular medical device maker (http://www.marketwatch.com/story/st-jude-medicals-stock-drops-after-short-seller-muddy-waters-takes-aim-2016-08-25).

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).

See:This global heavyweight is trying to break away--and take the S&P 500 with it (http://www.marketwatch.com/story/this-global-heavyweight-is-trying-to-break-away-and-take-us-stocks-with-it-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 Wednesday on disappointing U.S. inventory data.

--Sara Sjolin contributed to this report.

(END) Dow Jones Newswires

August 25, 2016 16:43 ET (20:43 GMT)

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