U.S. stocks slipped early and stayed down Thursday, as investors evaluated signals from two Federal Reserve officials pushing the case for interest rate hikes.
ON WALL STREET: At the close, The Dow Jones industrial average was down 33.1 points, about 0.2 percent, at 18,448.4. The Standard & Poor’s 500 index slipped nearly 3 points, about 0.1 percent, to 2,172.5. The Nasdaq composite gave up 5.5 points, about 0.1 percent, to 5,212.2.
FED WORD: Comments Thursday from Kansas City Fed President and voting member Esther George, as well as Dallas Fed President Robert Kaplan, seemed to follow the hawkish tone set by key Fed policymakers in recent days. Investors are awaiting Yellen’s speech Friday at an annual conference of central bankers in Jackson Hole, Wyoming. The Fed is expected to hold off on raising interest rates at its September meeting, but Yellen’s comments may offer clues on the likelihood and timing of a future hike.
ANALYST’S OPINION: “Clearly, the Fed is in the driver’s seat. They have the stage to command investor attention in Jackson Hole,” said analyst Peter Kenny, senior market strategist at Global Markets Advisory Group, in Manhattan. “The division among the voting members of the FOMC is very, very clear and there is nothing we have seen in recent data that would tilt the argument to the one side of raising or the other side of remaining unchanged in September.”
OIL PRICES: As markets were closing, U.S. benchmark crude oil was up 55 cents after a slide at $47.32 a barrel in electronic trading on the New York Mercantile Exchange. It fell $1.33 on Wednesday. In London, Brent crude, which is used to price oil internationally, gained 62 cents to $49.67 after sliding 91 cents the day before.
The market has refocused on oversupply and fading expectation of a production freeze, Reuters reported. Oil prices rose more than 20 percent in the first three weeks of August on talk of a potential deal by oil exporters to freeze production levels to try to support prices. But hopes of a deal have been dampened by record OPEC output and few analysts see the prospect of voluntary restrictions. Members of the Organization of the Petroleum Exporting Countries will meet on the sidelines of the International Energy Forum, which groups producers and consumers, in Algeria on Sept. 26-28.
MYLAN’S TROUBLE: Outrage over price increases by Mylan for its EpiPens, medical devices used to deliver adrenaline to a patient suffering from a potentially fatal allergic reaction, have pulled pharmaceutical companies lower. Mylan bought the rights to the product in 2007 and has raised the price from roughly $100 for two pens to roughly $600. Presidential candidate Hillary Clinton issued a statement Wednesday calling Mylan’s price increases “outrageous” and called for the company to slash prices for EpiPens.