Stocks Mixed on Yellen, Earnings

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U.S. equities bounced around the unchanged line on Wednesday as traders focused on the flow of fourth-quarter earnings results and fresh comments from Federal Reserve Board Chair Janet Yellen.

There is also a lot of anticipation for Friday’s inauguration of president-elect Donald Trump, with Wall Street concentrating on possible executive actions and legislative progress toward things like healthcare reform, tax reform, and spending increases.

In the end, the Dow Jones Industrial Average lost 0.1%, the S&P 500 gained 0.2%, the Nasdaq Composite moved up 0.3% and the Russell 2000 gained 0.5%. Treasury bonds were weaker following Tuesday’s rally, the dollar was stronger, gold was little changed and oil sold off down 2.7% boosting the ProShares UltraShort Crude Oil (NYSEARCA:SCO) to a 4.3% gain for Edge subscribers.

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Financial stocks led the way despite a 1.7% drop for Citigroup Inc (NYSE:C) on results, which was enough to push the bank below its 50-day moving average for the first time since September. Bank stocks have been leading the charge toward Dow 20,000 since Election Day, but some profit-taking has emerged in recent days.

Telecom and energy stocks were the laggards, down 0.8% and 0.3%, respectively.

Qualcomm, Inc. (NASDAQ:QCOM) gained 1.5% after Tuesday’s loss after the company said the FTC’s antitrust case is based on flawed legal theory and misconceptions about the mobile phone industry. As a reminder, government regulators charge the company has maintained a monopoly in cell phone semiconductors. Meanwhile, Netflix, Inc. (NASDAQ:NFLX) shares hit an all-time high after reporting subscriber growth that blew away its own forecasts.

A couple of retailers were hit, with J C Penney Company Inc (NYSE:JCP) down 2% on a downgrade from Credit Suisse on fears the industry is moving online and lower in price while Target Corporation (NYSE:TGT) fell 5.8% after reporting holiday comp-store sales down 1.3% and reduced guidance citing disappointing traffic.

On the economic front, Yellen said in a speech that the U.S. economy is close to the Fed’s goals of maximum employment and price stability — suggesting a quickened pace of rate hikes is likely in 2017. Separately, headline consumer price inflation rose 2.1% from last year for the biggest year-over-year gain since the summer of 2014 (when oil prices were peaking). Shelter and fuel prices drove the increase.

Technically, stocks look vulnerable to a downside move here as the Dow Jones Industrial Average tests below its lower Bollinger Band — a sign volatility is increasing amid rising selling pressure — for the first time since before Election Day.

Anthony Mirhaydari is founder of the Edge and Edge Pro investment advisory newsletters. A two-week and four-week free trial offer has been extended to InvestorPlace readers.


Article printed from InvestorPlace Media, https://investorplace.com/2017/01/stocks-finish-mixed-as-earnings-roll-in/.

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