Energy Stocks Bright Spot in U.S. Trading

By Markets Reuters

Energy stocks rallied over 2%, outperforming the broader market, after a surprise drop in weekly inventories, according the Energy Information Administration.

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Major U.S. stock averages were little changed as investors take in Congressional testimony by Federal Reserve Chair Janet Yellen.

Her comments will be watched for clues on the timing of the next interest rate hike, a week after the central bank held rates steady but suggested that a move could come later this year.

Ahead of her appearance Minneapolis Fed President Neel Kashkari said the central bank could keep rates low for a while as inflation remains weak.

Investors are also awaiting comments from Fed officials including voting members Esther George, James Bullard and Loretta Mester, who will be speaking at separate events.

Stocks, which have rallied in the absence of an interest rate hike this year, are highly sensitive to Fed comments due to a lack of consensus among officials on the timing of future increases.

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"I don't expect a major shift in Fed rhetoric, which is to make hawkish comments, but follow with dovish action," said Adam Sarhan, chief executive at Sarhan Capital.

"Unless Yellen or one of the other Fed heads go way off reservation and make a statement, I don't expect massive fireworks today."

Mattress maker Tempur Sealy's shares plunged 21.8 percent after the company forecast disappointing full-year sales.

Nike (NKE) dropped over 1% after the shoemaker's future orders missed analysts' estimates for the third time in a row, attracting a slew of price targets by brokerages.

Wells Fargo (WFC) rose following its statement that CEO John Stumpf would forfeit unvested equity awards worth about $41 million and will not get a salary while the board investigates its sales practices.

The S&P 500 index showed nine new 52-week highs and one new lows, while the Nasdaq recorded 40 new highs and six new lows. (Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Anil D'Silva)