Major Averages Turn Mixed After Seeing Early Strength - U.S. Commentary

(RTTNews) - After initially moving higher in reaction to a highly anticipated speech by Federal Reserve Chair Janet Yellen, stocks have given back some ground in recent trading on Friday. The major averages have pulled back well off their highs for the session.

Currently, the major averages are turning in a mixed performance. While the Dow is down 18.46 points or 0.1 percent at 18,429.95, the Nasdaq is up 8.76 points or 0.2 percent at 5,220.97 and the S&P 500 is up 0.79 points or less than a tenth of a percent at 2,173.26.

Traders continue to react to Yellen's remarks at the Kansas City Fed's monetary policy symposium, in Jackson Hole, Wyoming.

In her prepared remarks, Yellen said she believes the case for raising interest rates has strengthened in recent months.

Yellen said the economy is nearing the Fed's goals of maximum employment and price stability and noted the central bank expects additional strengthening in the labor market and inflation rising to 2 percent over the next few years.

However, Yellen stressed that the Fed's monetary policy decisions always depend on the degree to which incoming data continues to confirm the outlook.

"Overall, along with the more upbeat tone of the recent data, we think the odds of a September rate hike have probably increased," said Andrew Hunter, U.S. Economist at Capital Economics. "They will increase further if we are right in forecasting that non-farm payrolls increased by a solid 180,000 in August."

He added, "Nonetheless, with real GDP expanding by just 1.2% over the past 12 months and inflation continuing to run below target, we still think most Fed officials will want to wait until December before next raising rates."

The Commerce Department released a report before the start of trading showing a slight downward revision to the pace of U.S. economic growth in the second quarter.

The report said gross domestic product increased by 1.1 percent in the second quarter, reflecting a downward revision compared to the originally reported 1.2 percent growth. The revision matched economist estimates.

The downwardly revised GDP growth in the second quarter still reflects an acceleration from the 0.8 percent increase seen in the first quarter.

A separate report from the University of Michigan unexpectedly showed a slight deterioration in consumer sentiment in the month of August.

Sector News

Steel stocks continue to see considerable strength in mid-day trading, with the NYSE Arca Steel Index climbing by 1.1 percent. The index continues to regain ground after ending Wednesday's trading at its lowest closing level in a month.

Brazil's CSN (SID), Gerdau (GGB), and U.S. Steel (X) are turning in some of the steel sector's best performances on the day.

Computer hardware and biotechnology stocks also continue to see some strength, while weakness has emerged among networking stocks.

Other Markets

In overseas trading, the lackluster mood continued in the Asia-Pacific region, leading to another mixed close on Friday. While Japan's Nikkei 225 Index slumped by 1.2 percent, Hong Kong's Hang Seng Index rose by 0.4 percent.

Meanwhile, the major European markets have all moved higher on the day. While the U.K.'s FTSE 100 Index edged up by 0.3 percent, the German DAX Index climbed by 0.6 percent and the French CAC 40 Index advanced by 0.8 percent.

In the bond market, treasuries have pulled back near the unchanged line after moving higher on the heels of Yellen's remarks. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by less than a basis point at 1.575 percent.