Wall Street flat as stocks pause after recent rally

Traders work in the Citigroup booth on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., May 25, 2016. REUTERS/Brendan McDermid

NEW YORK: US stocks were little changed at the open on Thursday, taking a breather from their robust two-day run, as investors keenly await a speech from Fed chair Janet Yellen on Friday.

Oil topped the psychologically important US$50 a barrel on Thursday, as a global supply glut showed signs of easing.

Comments from policymakers in recent days and upbeat US economic data have raised expectations that the Federal Reserve could pull the trigger on a rate increase much sooner than previously thought.

Traders are now pricing in a 32% chance of a rate hike in June, up from just 4% early last week, according to CME Group’s FedWatch tool.

“Markets are becoming more comfortable with a rate hike in June or July,” said Peter Cardillo, chief market economist at First Standard Financial in New York.

“The market will be looking for some direction from Yellen. If she’s more hawkish, you could see the market changing direction.”

At 9:41am ET (1341 GMT) the Dow Jones industrial average was up 21.23 points, or 0.12%, at 17,872.74, the S&P 500 was up 2.12 points, or 0.1%, at 2,092.66 and the Nasdaq Composite was up 3.62 points, or 0.07%, at 4,898.51.

Seven of the 10 major S&P sectors were higher, with the energy index’s 0.56 rise leading the gainers.

Orders for US durable goods, which include items ranging from toasters to aircraft, surged in April on strong demand for transportation equipment and a range of other products.

Another piece of data showed the number of Americans filing for unemployment benefits fell more than expected last week as the economy regains momentum after stumbling in the first quarter.

St Louis Federal Reserve president James Bullard said on Thursday that US labour markets are relatively tight and may put upward pressure on inflation.

Federal Reserve Board governor Jerome Powell, a permanent voter on the Fed’s rate-setting committee, is scheduled to speak later on Thursday.

Discount retailers Dollar General and Dollar Tree hit record high after reporting better-than-expected quarterly profits.

Abercrombie & Fitch shares fell 11.5% to US$22.25 after posting its 13th straight quarter of sales decline, becoming another example of a depressed apparel market.

Sears Holdings jumped 12.6% to US$14.12 after it said it was exploring potential partnerships or other deals for some of its units.

Advancing issues outnumbered decliners on the NYSE by 1,653 to 920. On the Nasdaq, 1,168 issues rose and 1,005 fell.

The S&P 500 index showed 10 new 52-week highs and no new lows, while the Nasdaq recorded 16 new highs and five new lows. - Reuters