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NEW YORK (AP) — Stocks ended mostly lower on Friday after Federal Reserve officials said the case has strengthened for raising interest rates above the super-low levels that have helped fuel a seven-year bull market.
Major U.S. indexes initially climbed after a speech by Fed Chair Janet Yellen that was bullish on the economy but gave no timetable for future rate increases. Then investors began to have second thoughts, wondering if an increase was possible as early as next month, and buyers turned to sellers.
By the close of trading, seven of the 10 sectors of the Standard and Poor's 500 index had fallen, led by a 2.1 percent drop in utilities. Investors frustrated with low-yielding bonds have flocked to utilities for their steady dividends, but higher rates would make those stocks less attractive.
The S&P 500 slipped 3.43 points, or 0.2 percent, to 2,169.04. The Dow Jones industrial average fell 53.01 points, or 0.3 percent, to 18,395.40. The Nasdaq composite rose 6.71 points, or 0.1 percent, to 5,218.92.
In her speech in Jackson Hole, Wyoming, Yellen noted that the Fed is moving toward raising interest rates in light of a solid job market and an improved outlook for the economy. But she stopped short of signaling when the next rate hike might be.
Stocks climbed as investors perceived her comments as "dovish," meaning a continuation of the easy money policies. Yields on government bonds fell.
But by the end of the day both stocks and bonds had reversed, with the yield on the 10-year Treasury note rising to 1.62 percent from 1.58 percent late Thursday.
Perhaps helping the turn of sentiment were comments on CNBC from Fed Vice Chair Stanley Fischer suggesting the central bank could raise rates twice before year's end, instead of once in December as many investors had been expecting.
Lisa Kopp, senior vice president at U.S. Bank Wealth Management, said she wasn't surprised by the selling given the "jitteriness" in the markets.
"Anything that's not going to be straight-out dovish is going to be disappointing," she said.
Yellen's speech on Friday notwithstanding, not everyone is convinced a rate hike is coming soon.
"She suggests the economy is improving, but the GDP numbers for the past three quarters are closer to 1 percent than three percent," said Bruce Bittles, chief investment strategist at R.W. Baird. "That is very anemic."
A report early in the day from the Commerce Department showed GDP, or gross domestic product, for the second quarter rose by a revised 1.1 percent, slightly lower than initially forecast.
Since exiting the recession in the summer of 2009, the U.S. economy has been growing sluggishly, making it the slowest recovery since World War II.
Among stocks making moves on Friday, Herbalife fell $1.43, or 2.3 percent, to $60.50 after news reports that that Carl Icahn, the company's biggest shareholder and defender, has been trying to unload his stake in the embattled company. After trading closed, Icahn said the reports were wrong and, in fact, he has bought more shares.
Design software company Autodesk jumped $5.17, or 8 percent, to $68.87 after reporting a small profit, beating expectations of a loss.
Earnings per share for companies in the S&P 500 index are expected to fall 1.8 percent in the second quarter, according to S&P Global Market Intelligence. That would be the fourth quarter in a row of drops.
In overseas markets, Britain's FTSE 100 rose 0.3 percent, Germany's DAX gained 0.6 percent and France's CAC 40 climbed 0.8 percent.
In Asia, Japan's Nikkei 225 fell 1.2 percent after consumer prices fell the most in three years in July. Hong Kong's Hang Seng index rose 0.4 percent.
Benchmark U.S. crude oil rose 31 cents to close at $47.64 a barrel. Brent crude, used to price oil internationally, rose 25 cents to close at $49.92 a barrel.
Wholesale gasoline was little changed at $1.52 a gallon, heating oil slipped 1 cent to $1.50 a gallon and natural gas rose 2.5 cents to $2.871 per 1,000 cubic feet.
The dollar rose to 101.86 yen from 100.57 yen the previous day. The euro fell to $1.1183 from $1.1281.
Gold rose $1.30 to $1,325.90 an ounce, silver rose 13 cents to $18.75 an ounce and copper was little changed at $2.08 a pound.