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U.S. Stocks Higher With Yellen Cautious on Rate Increase

GuruFocus.com

- By Julie Young

U.S. market indexes were higher Friday as GDP was revised up slightly and Yellen was more cautious on the next rate increase which tracked market sentiment. For the day, the Dow Jones Industrial Average closed at 17873.22 for a gain of 44.93 points or 0.25%. The indexas gains were led by UnitedHealth (UNH). The S&P 500 was higher at 2099.06 for a gain of 8.96 points or 0.43%. Sectors in the S&P 500 leading gains included financial and technology. The Nasdaq Composite was higher at 4933.50 for a gain of 31.74 points or 0.65%. The VIX Volatility Index was lower at 13.15 for a loss of 0.28 points or 2.08%.


For the week the DJIA was higher by 2.10%. The S&P 500 was higher by 2.25% and the Nasdaq Composite was higher by 3.41%. The VIX Volatility Index was down 13.68%.

Friday included the leading economic indicators for the week with the second estimate of first quarter GDP released by the Bureau of Economic Analysis. The second estimate was revised up to 0.80% from 0.50%, which is still below consensus of 0.90%. Corporate profits for the first quarter were down 3.6%, which matched the fourth quarteras decrease of 3.6%. Consumer sentiment from the University of Michiganas Consumer Sentiment Index was at 94.7, which was below consensus of 95.5. Overall the economic indicators are mainly flat with a flat outlook for the remainder of the year.

Janet Yellen received an award from the Radcliffe Institute for Advanced Study at Harvard University on Friday afternoon and gave a speech. The speech was dovish with her comments suggesting a rate increase in the next few months but not indicating June. Her comments tracked the recent sentiment in trading. Given the current economic outlook and earnings environment, investors are not pricing in the immediate need for a rate increase in June.

In a CNBC interview following the afternoon speech, Steve Liesman gave a recap with insight on trading activity.

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