US stock indexes mixed in afternoon trading; oil rises

U.S. stock indexes wavered between small gains and losses in late-afternoon trading Friday as investors weighed the growing likelihood that the Federal Reserve will raise interest rates later this month. In a speech, Fed Chair Janet Yellen said the central bank will likely lift rates, citing an improving job market and rising inflation. Banks, which would benefit from higher interest rates, led the gainers. Real estate stocks lagged the most.

KEEPING SCORE: The Dow Jones industrial average rose 5 points, or less than 0.1 percent, to 20,008 as of 3:21 p.m. Eastern Time. The Standard & Poor’s 500 index was down less than 1 point at 2,381. The Nasdaq composite index gained 2 points, or 0.1 percent, to 5,864.

RATE HIKE LIKELY: Speaking in Chicago on the Fed’s economic outlook, Yellen said the Fed will likely resume raising interest rates later this month to reflect a strengthening job market and inflation edging toward the central bank’s 2 percent target rate. Yellen added that the central bank expects steady economic improvement to justify additional rate increases. While not specifying how many rate hikes could occur this year, Yellen noted that Fed officials in December had estimated that there would be three this year. Yellen was the latest Fed official to signal in recent days that the central bank is ready to resume raising rates as soon as its next two-day meeting of policymakers on March 14-15.

THE QUOTE: “The real takeaway here is if the Fed is willing to start moving, they see the economy as not only doing better but likely to do better going forward,” said Brad McMillan, chief investment officer at Commonwealth Financial Network. “The Fed is notorious for waiting until the evidence of growth is absolutely undeniable.”

BOOST FOR BANKS: Several banks and other financial stocks were trading higher on hopes that the Fed will raise interest rates, which would help make lending more profitable. Bank of the Ozarks added 92 cents, or 1.7 Percent, to $56.07, while Signature Bank rose $2.57, or 1.6 percent, to $162.02.

BIG-BOX DISAPPOINTMENT: Costco slid 4.5 percent a day after the warehouse club operator reported earnings that missed estimates. Costco also said it is going to raise its membership fees. The stock fell $7.97 to $170.01.

SHOOTING BLANKS: American Outdoor Brands, formerly called Smith & Wesson, fell 2.3 percent after the firearms manufacturer cut its outlook, citing declining sales. The stock shed 45 cents to $18.93.

SAD FACE: Revlon slid 5.4 percent after the beauty products company said its business suffered in the fourth quarter as consumers continued to do more shopping online and at specialty retailers during the holidays. The stock lost $1.85 to $32.20.

RETAIL SLUMP: Macy’s and Urban Outfitters were among several retailers trading lower. Macy’s was the biggest decliner in the S&P 500, sliding $1.81, or 5.4 percent, to $31.41. Urban Outfitters lost 93 cents, or 3.5 percent, to $26. Meanwhile, L Brands, the parent of Victoria’s Secret, fell 2.2 percent after the retailer disclosed a big decline in its sales in February. Its shares dipped $1.16 to $52.25.

DARK CLOUDS: Nutanix tumbled 24.1 percent after the enterprise cloud platform services provider gave a forecast for the third quarter that was worse than Wall Street expected. The stock gave up $7.49 to $23.63.

PRICING PROBE: Shares in Perrigo were down 3.8 percent on a published report saying the government is investigating the prices of some of the company’s skin drugs. The stock slid $2.84 to $72.72.

EXCEEDING EXPECTATIONS: Big Lots climbed 4.6 percent after the discount retailer reported a larger profit than analysts expected. The stock added $2.38 to $54.62.

TAKING OFF: Traders bid up shares in several airlines. American Airlines Group rose $1.06, or 2.3 percent, to $46.78, while Alaska Air Group added $2.64, or 2.7 percent, to $99. United Continental picked up $2.21, or 3 percent, to $75.50.

MARKETS OVERSEAS: In Europe, Germany’s DAX fell 0.3 percent, while France’s CAC 40 rose 0.6 percent. Britain’s FTSE slipped 0.1 percent. In Asia, Japan’s Nikkei 225 index fell 0.5 percent, while South Korea’s Kospi sank 1.1 percent. Hong Kong’s Hang Seng index lost 0.7 percent.

OIL: Energy futures rose. Benchmark U.S. crude gained 72 cents, or 1.4 percent, to close at $53.33 a barrel in New York. Brent crude, used to price international oils, added 82 cents, or 1.5 percent, to close at $55.90 a barrel in London. Wholesale gasoline picked up a penny to close at $1.65 a gallon. Heating oil added a penny to close at $1.59 a gallon. Natural gas rose 2 cents to close at $2.83 per 1,000 cubic feet.

TREASURY YIELDS: Bond prices fell, pushing yields higher. The 10-year Treasury yield rose to 2.49 percent from 2.48 percent late Thursday.

CURRENCIES: The dollar fell to 114.04 yen from 114.51 yen on Thursday. The euro rose to $1.0599 from $1.0502.

METALS: Gold fell $6.40 to $1,226.50 an ounce. Silver slipped a penny to $17.70 an ounce. Copper rose a penny to $2.69 a pound.

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