WASHINGTON: U.S. stock-market indexes relinquished earlier gains to close little changed on Tuesday, with the Dow industrials extending a losing streak to a fourth session. Investors appeared to shrug off comments from Federal Reserve Chairwoman Janet Yellen, who cautioned against moving too slowly on interest rates. Yellen said there is a risk that the labor market could become overheated, causing an inflation problem down the road. The S&P 500 SPX, +0.01% closed a fraction of a point higher at 2,496.84, with eight of the 11 main sectors ending lower. Telecoms and materials led the losses, down 0.9% and 0.4%, respectively, while technology shares rebounded slightly, ending 0.4% higher. The Dow Jones Industrial Average DJIA, -0.05% slipped 11.77 points, or less than 0.1%, to 22,284.32. Apple, Inc. AAPL, +1.72% gained 1.7%, halting a four-session skid.
The tech-heavy Nasdaq Composite COMP, +0.15% advanced 9.57 points, or 0.1%, to 6,380.16, recouping a fraction of losses from the previous session. “All else stable and equal (as December meeting is still about 3 months away), the Fed is hiking rates again in December we believe and Janet Yellen is essentially telling us that today,” Peter Boockvar, chief market analyst at The Lindsey Group LLC, said in emailed comments. Market expectations for a rate increase in December, observed from the prices in Fed funds futures, moved up to 76%, according to CME Group’s FedWatch Tool. Boockvar notes that the stock market is still focused on potential fiscal policies rather than the Fed policy. “Russell 2000 is up 5.8% over past month, the S&P 500 is up by more than half that at 2.2%. The stock market continues to be focused on tax reform as seen with the price action in the Russell 2000,” Boockvar said. The Russell 2000 index of small-cap stocks RUT, +0.34% closed at a record, after rising 4.9 points, or 0.3%, to 1,456.86. The index of small-cap stocks outperformed the S&P 500 in September, gaining 3.5%, more than double of its large-cap counterpart.
