By Corrie Driebusch And Saumya Vaishampayan
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.
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.
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.
Write to Corrie Driebusch at corrie.driebusch@wsj.com and Saumya
Vaishampayan at saumya.vaishampayan@wsj.com