U.S. stocks were mixed Friday, but off intraday lows, after Federal Reserve Chairwoman Janet Yellen reiterated the central bank's intention to raise short-term interest rates this year.
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Many investors expect the Fed to increase rates in September, but there is little consensus as to whether slightly higher borrowing costs will derail a bull run that is in its seventh year. With higher rates well telegraphed, money managers are turning their attention to the likelihood of subsequent rate increases. In her remarks Friday, Ms. Yellen also emphasized the economic headwinds such as slow wage growth, low inflation and disappointing growth, discouraging the view that the Fed would embark on a full-fledged tightening cycle.
The Dow Jones Industrial Average fell 13 points, or 0.1%, to 18272. The S&P 500 was about flat at 2131 after spending much of the trading session in negative territory. The Nasdaq Composite rose 8.7 points, or 0.2%, to 5099.
Stock-trading volume was muted Friday ahead of the long weekend, mirroring the past several trading sessions. The week is on pace to be the slowest since the week including New Year's Day. The stock market will be closed Monday for Memorial Day.
"There's not a lot of fresh ideas or catalysts out there right now," said Brett Mock, managing director at brokerage firm JonesTrading Institutional Services LLC.
As first-quarter earnings season draws to a close, investor focus is largely back on the timing of any interest-rate increase by the Federal Reserve, traders said.
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Earlier Friday the Labor Department released a stronger-than-expected reading on inflation in April.
The consumer-price index rose 0.1% in April from a month earlier, the Labor Department said Friday. Excluding the food and energy categories, so-called core prices gained 0.3%, the largest increase since January 2013. Economists surveyed by The Wall Street Journal had expected overall prices to increase 0.1% and core prices to rise 0.2%.
Federal Reserve officials are watching for signs that inflation is picking up as they debate when to raise short-term rates for the first time since June 2006.
Stocks rose Thursday, propelling the S&P 500 to a record close. The S&P added 0.2% to 2130.82. The Dow was up 0.34 point to 18285.74, ending 0.1% below its most recent record of 18312.39.
The Dow industrials have risen 0.1% for the week through Thursday's close. The S&P and Nasdaq are on track to post more substantial gains, up 0.4% and 0.8% in the same period, respectively.
"We've got the Dow and S&P touching new highs, but it doesn't seem to be with very much enthusiasm," said Colin Cieszynski, chief market strategist at CMC Markets.
In Europe, Germany's DAX slipped 0.4%, while France's CAC 40 edged down 0.1%.
In commodity markets, gold futures added 0.2% to $1206.00 an ounce. Crude-oil futures lost 1.6% to $59.72 a barrel. The yield on the 10-year Treasury note was at 2.216%, compared with 2.186% on Thursday. Yields fall as prices rise.
In corporate news, Deere & Co.'s shares rose 4% after the farm-equipment producer reported its profit dropped in the latest quarter though results were still better than feared.
Campbell Soup Co. reported its profit easily topped expectations in the latest quarter as the company scaled back promotions and began implementing cost-cutting plans. Shares rose 1.9%.
Aéropostale Inc. shares tumbled 14% after the teen retailer projected a wider-than-expected loss for the July quarter.