Dow, S&P 500 stay lower after Yellen comments

By Caroline Valetkevitch

(Reuters) - The S&P 500 and the Dow stayed modestly lower on Wednesday afternoon following comments by Federal Reserve Chair Janet Yellen suggesting the U.S. central bank may be ready to raise rates.

Record highs in Alphabet, Amazon and Netflix kept the Nasdaq in slightly positive territory.

In prepared remarks to the Economic Club of Washington, Yellen said she was "looking forward" to a rate hike that will be seen as a testament to the economy's recovery from recession. She did not indicate if she still expected a rate hike would be warranted at the Fed's last remaining policy meeting this year on Dec. 15-16.

 

"Pretty much as expected ... I think the Fed has given investors a lot of time and a lot of direction that they plan to do this. If it is coming as a surprise to you now, you just haven't been following this," said Rick Meckler, president of LibertyView Capital Management in Jersey City, New Jersey.

Yellen also expressed confidence in the U.S. economy.

Earlier in the day, data showed U.S. private employers in November added the largest number of jobs since June.

The energy index <.SPNY>, down 2.7 percent, led the decline in the S&P 500, followed by the utility index <.SPLRCU>, down 1.7 percent. Utilties tend to underperform in a higher-rate environment.

At 1:08 p.m., the Dow Jones industrial average <.DJI> fell 43.99 points, or 0.25 percent, to 17,844.36, the S&P 500 <.SPX> lost 8.32 points, or 0.4 percent, to 2,094.31 and the Nasdaq Composite <.IXIC> added 6.71 points, or 0.13 percent, to 5,163.02.

Yellen also is due to testify on the economic outlook before a joint Congressional committee on Thursday.

Shares of Amazon touched a record high of $684.82, while those of Netflix rose as much as 4.8 percent to $131.35. Alphabet rose as much as 1.2 percent to $793.04. Shares of Microsoft were up 1 percent at $55.78 and hit at more than 14-year high of $55.96.

Airline shares also rose after Delta Air Lines Inc said it earned more per mile in November than a year ago. Delta was up 2.7 percent at $48.94, while an index of airlines <.XAL> was up 1.3 percent.

(Corrects paragraph three to show Fed meeting Dec. 15-16, not next week)

(Additional reporting by Sweta Singh and Charles Mikolajczak; Editing by Nick Zieminski and Chizu Nomiyama)