By Anora Mahmudova and Sara Sjolin, MarketWatch
Yellen: gradual hikes are likely this year
NEW YORK (MarketWatch)--U.S. stocks broke a four-day losing
streak by closing slightly higher on Friday, but still posted the
biggest weekly loss since the end of January.
The main indexes, which were barely in positive territory the
entire session, rallied modestly in the last 15 minutes of trading
after the release of prepared remarks by Federal Reserve Chairwoman
Janet Yellen on monetary policy.
Yellen said that gradual rate hikes are likely this year
(http://www.marketwatch.com/story/feds-yellen-says-rate-hikes-but-not-too-many-are-coming-2015-03-27)but
stressed that the central bank would move cautiously.
"I expect that conditions may warrant an increase in the federal
funds rate target sometime this year," Yellen told a conference
sponsored by the San Francisco Fed.
The S&P 500 (SPX) closed 4.87 points, or 0.2%, higher at
2,061.02, but lost 2.2% over the week. The benchmark index inched
back into positive territory for the year after Friday's modest
gain.
The Dow Jones Industrial Average (DJI) ended the session up
34.43 points, or 0.2% at 17,712.66, but recorded a 2.3% decline
over the past week. Transportation stocks were among the biggest
losers this week, with the Dow Transportation Average (DJT) losing
4.9%.
The Nasdaq Composite (RIXF) added 27.86 points, or 0.6%, to
4,891.22. The tech-heavy index finished the week down 2.7%.
Biotechnology stocks also took a beating this week, with the
iShares Nasdaq Biotechnology ETF (IBB) losing 5.2% over the
week.
Ahead of the opening bell, investors assessed the government's
final revision to fourth-quarter U.S. GDP, which remained unchanged
at 2.2%. The report also showed that quarterly corporate profits
over the same period fell for the first time since 2008
(http://www.marketwatch.com/story/corporate-profits-fall-in-fourth-quarter-2014-2015-03-27)
(http://www.marketwatch.com/story/corporate-profits-fall-in-fourth-quarter-2014-2015-03-27).
Analysts said that worries about sluggish corporate profits have
weighed on sentiment.
Jeff Carbone, founder and senior partner for Cornerstone
Financial Partners, noted that an expected drop in corporate
earnings in the fourth quarter is pointing to a sluggish
economy.
"The weakness over the past week was mostly driven by
geopolitical concerns and worries over sluggish profit earnings. We
will have to wait until the actual earnings season to find out
whether it was weather-related or not," Carbone said.
"We still believe stocks will finish the year higher, but
perhaps now is the time to rebalance portfolios," he added.
Yellen speech: Yellen, for the first time, said that the Fed
would stay on hold if there were further weakening in key inflation
indicators. But she added that it wouldn't take an increase in
inflation or wages to prompt the Fed to raise interest rates.
Data: The U.S. economy grew 2.2% in the fourth quarter of 2014,
unchanged from the government's prior estimate, the Commerce
Department said Friday.
The final reading of the University of Michigan's consumer
sentiment survey for March was 93--above the 92.5 forecast in a
MarketWatch-compiled economist survey. The final reading is still
at a four-month low.
Stocks to watch:Quicksilver's(ZQK) shares tumbled 7.6% after the
company ousted its chief executive Andy Mooney and installed Pierre
Agnes, who has worked at the firm for 27 years as the new CEO.
Shares of Orexigen Therapeutics Inc.(OREX) climbed 3.9% after
the biotech firm received a green light from European regulators
for its Mysimba diet drug.
Ahead of the bell on Friday, BlackBerry Ltd. (RIMM) jumped 4.3%
after reporting fourth-quarter earnings of 4 cents a share, beating
forecasts of a four-cent loss.
Shares of Altera Corp.(ALTR) shot up 28% to the highest level
since July 2011 in late-afternoon trade Friday, after The Wall
Street Journal reported that semiconductor maker held talks to be
bought out by Intel Corp.(INTC). Intel shares jumped 6.4%.
For more on notable movers, read Movers & Shakers column.
(http://www.marketwatch.com/story/blackberry-carnival-finish-line-earnings-in-focus-2015-03-27)
Other markets: Commodities saw big gains over the week.
Crude-oil futures
(http://www.marketwatch.com/story/crude-oil-prices-fall-as-yemen-conflict-escalates-2015-03-27)(CLK5)
gained about 5% for the week, with strength fueled in part by an
escalating conflict in Yemen. Though, on Friday oil slid 5% to
settle at $48.87 a barrel.
Gold futures
(http://www.marketwatch.com/story/golds-seven-session-win-streak-at-risk-2015-03-27)(GCK5)
gained 1.3% over the week, but on Friday the yellow metal settled
with a loss, breaking a seven-session stretch of gains. Futures
settled at $1,199.80 an ounce.
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