Wednesday, 15 July 2015 21:54
NEW YORK: US stock prices held steady on Wednesday as Federal Reserve chair Janet Yellen affirmed a likely interest rate increase by year-end, while the euro fell ahead of a Greek government vote on whether to accept tough terms for a vital third bailout.
Oil prices fell on worries of growing supply from Iran following a landmark deal that would lift sanctions that have curbed its oil sales for several years.
“If the economy evolves as we expect, economic conditions likely would make it appropriate at some point this year to raise the federal funds rate,” Yellen said in a testimony prepared for a U.S. House panel.
While a Fed “lift-off” raises domestic borrowing costs, the expected slow pace of rate normalization shouldn’t cut much into economic growth and corporate profits, analysts said.
“Stocks are taking to heart that it’s a going to be a kinder and gentler Fed,” said Charles Retzky, director of futures sales at Mizuho Securities USA in Chicago.
In midday trading, the Dow Jones industrial average rose 4.41 points, or 0.02 percent, to 18,057.99, the S&P 500 gained 1.04 points, or 0.05 percent, to 2,109.99 and the Nasdaq Composite added 5.83 points, or 0.11 percent, to 5,110.72.
The dollar strengthened against a basket of currencies, with the dollar index last up 0.5 percent at 97.07.
As traders monitored fresh clues on the timing of a Fed rate increase, they awaited news on whether Greece’s parliament will approve a third bailout to avert bankruptcy and a possible exit from the euro zone currency bloc.
The euro was down 0.3 percent against the dollar at $ 1.09695 and was flat at 135.825 yen.
The pan-European FTSEurofirst 300 index provisionally closed up 0.4 percent at 1,586.50, rising five days in a row.
Uncertainties over the Greek vote outcome spurred safe haven bids for German and U.S. bonds. Yields on 10-year German Bunds fell 9 basis points to 0.76 percent, while U.S. 10-year Treasuries yields declined 3 basis points to 2.367 percent.
Steady to higher U.S. and European equity prices offset the drop in some Asian and emerging market stocks despite better-than-expected Chinese economic data.
In the oil market, Brent crude was down $ 1.01 or 1.7 percent at $ 57.50 a barrel, while U.S. oil futures were down $ 1.23 or 2.3 percent at $ 51.81.
Spot gold prices were down 0.6 percent at $ 1,147.66 an ounce.
