The S&P 500 stepped back from an all-time high as a
widely-watched speech by Federal Reserve Chairwoman Janet Yellen failed to
generate expected fireworks. Still, the index capped its third consecutive
weekly advance, which featured a record close of 1992.37 on Thursday. Stocks
have recovered sharply from a late-July selloff, putting the S&P 500 up
7.6% so far in 2014.
On Friday, the S&P 500 slipped 3.97 points, or 0.2%, to
1988.40. The Dow Jones Industrial Average slid 38.27 points, or 0.2%, to
17001.22. The Nasdaq Composite Index gained 6.45 points, or 0.1%, to 4538.55.
The Dow industrials are up 2.6% for the year to date, while the Nasdaq is up
8.7%.
A quiet session Friday featured Ms. Yellen noting
improvement in the labor market without giving a clear sign as to when the
central bank may raise interest rates, in a speech before bankers at a conference
in Jackson Hole, Wyo. Traders described her remarks as largely in-line with
stock investors' expectations.
Money managers have been keenly focused on the Fed and when
it will reverse an easy-money posture largely seen as having helped fuel stocks'
rally to record levels.
Geopolitical tensions damped the market's tone Friday.
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. The Dow briefly fell as much as 55 points after the North
Atlantic Treaty Organization condemned the convoy's entry into Ukraine.
The geopolitical tensions also sparked buying of haven
bonds. The 10-year U.S. Treasury note reversed morning declines to yield
2.405%. Bond yields move inversely to prices. Despite the central-bank and
geopolitical drama, stock traders said it was a quiet day at the office. The
U.S. market saw 4.3 billion shares change hands, the lowest total for any
full-day session this year.
Meanwhile, investors have been putting fresh 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.
And some say there simply is nowhere else to invest, with
bond sporting historically low yields and poised to see their prices fall if
interest rates rise. Still, after a series of records, some say equities are
overextended. And conflicts in the Middle East and Ukraine have led to bouts of
volatility in recent months.
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