U.S. stocks ended Thursday's choppy session slightly lower as investors grappled with comments from Federal Reserve officials about the possibility of raising interest rates this year.
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John Williams, president of the San Francisco Fed, (http://www.marketwatch.com/story/feds-williams-argues-against-using-monetary-policy-to-address-stability-concerns-2015-05-28)said the U.S. central bank is likely to raise rates later this year, reiterating Chairwoman Janet Yellen's view, expressed on Friday. Speaking to the Monetary Authority of Singapore, Williams also said the central bank shouldn't use interest-rate policy to address risks to financial stability.
The S&P 500 (SPX) closed 2.69 points, or 0.1%, lower at 2120.79. The Dow Jones Industrial Average (DJI) dropped 36.87 points, or 0.2%, to 18,126.12. The Nasdaq Composite Index (RIXF) fell 8.62 points, or 0.2%, to 5,097.98, retreating slightly from the record level reached on Wednesday.
Tim Dreiling, senior portfolio manager at the Private Client Reserve at U.S. Bank, said recent trading pattern of the S&P 500 index suggests we are in the waiting game before the first rate hike.
"The trading range of the S&P 500 has tightened and we expect further summer slowdown, as there is not going to be much to jolt the market in either direction until the Federal Reserve begins raising interest rates. The Fed is most likely to start in September, but it will not do anything that will be disruptive to the markets," Dreiling said.
Market reaction to weekly jobless claims data was mostly muted. A jump in weekly jobless claims was bigger than expected; however, the pace of layoffs still remained near a record low.
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Data: The number of people who applied for unemployment benefits (http://www.marketwatch.com/story/jobless-claims-climb-to-five-week-high-of-282000-2015-05-28)in late May rose to a five-week high. Initial jobless claims climbed by 7,000 to a seasonally adjusted 282,000 in the week ending May 23, the Labor Department said Thursday.
A gauge of pending home sales (http://www.marketwatch.com/story/aprils-gauge-of-pending-home-sales-highest-in-nine-years-2015-05-28)increased in April for the fourth consecutive month to reach the highest level in nine years, signaling that upcoming deals could pick up, a trade group said Thursday.
Looking ahead, market watchers also are awaiting a revision of U.S. first-quarter gross domestic product due Friday and a report on consumer sentiment.
Fed speakers:St. Louis Fed President James Bullard (http://www.marketwatch.com/story/feds-bullard-wants-confirmation-of-rebound-prior-to-hike-2015-05-28)in an interview with Bloomberg Radio said Thursday he wants to see "confirmation" that the economy is bouncing back before raising interest rates.
Minneapolis Fed President Narayana Kocherlakota (http://www.marketwatch.com/story/feds-kocherlakota-policy-aim-should-be-three-more-strong-years-of-labor-gains-like-2014-2015-05-28) in a speech in Helena, Mont., said: "It follows that monetary policy makers should be extraordinarily patient about reducing the level of monetary accommodation."
Speculation that the Fed will move on rates later this year has recently supported the dollar, with the greenback (USDJPY) jumping to a 12-year high against the yen (http://www.marketwatch.com/story/dollar-taps-a-12-year-high-against-yen-2015-05-28) on Thursday before pulling back slightly.
Earnings:Costco Wholesale Corp.(COST) said third-quarter profit rose as it got a boost from low gas prices, strong store sales and membership fees. Shares were down 0.8%.
Abercrombie & Fitch Co.(ANF) reported a wider-than-expected loss during the first quarter, but the retailer gave an optimistic outlook for the rest of the year, sending shares up 13.5%.
GameStop Corp.(GME) shares gained 6% after the company beat earnings expectations.
Movers and shakers:Avago Technologies Ltd.(AVGO) said it would buy rival chip maker Broadcom Corp.(BRCM) for $37 billion in cash and stock. Shares of Broadcom fell 1.6%.
For more on today's notable movers read Movers & Shakers column (http://www.marketwatch.com/story/abercrombie-fitch-costco-gamestop-earnings-in-focus-2015-05-28).
Other markets: Chinese stocks fell by the most in four months (http://www.marketwatch.com/story/china-stocks-plunge-65-after-sovereign-fund-cuts-stakes-in-banks-2015-05-28), as the Shanghai Composite Index skidded 6.5%. European stock markets were mostly lower (http://www.marketwatch.com/storyno-meta-for-guid).
Oil futures (http://www.marketwatch.com/storyno-meta-for-guid)(CLN5) settled slightly higher, up 0.3%, at $57.68. Gold prices (http://www.marketwatch.com/story/gold-attempts-to-break-4-day-losing-streak-2015-05-28)(GCM5) also settled higher, up 0.2% at $1,188.10 an ounce, breaking a four-day decline.
(By Anora Mahmudova and Sara Sjolin)