VelocityShares 3x Inverse Crude Oil ETN (DWT)

[Smittle]

Stocks slide as Fed’s George says it’s ‘time to move’ on interest rates

By Mark DeCambre and Sara Sjolin

Published: Aug 25, 2016 9:49 a.m. ET

Workday rallies after earnings; Jackson Hole retreat in focus on Friday

Investors are waiting for just one thing: Fed chief Janet Yellen

U.S. stocks dropped Thursday as investors remained skittish ahead of a key economic symposium in the Rocky Mountains and as a member of the Federal Reserve indicated that a rate-hike is merited sooner than later.

“When I look at where we are with the job market, when I look at inflation and our forecast for that, I think it is time to move,” Kansas City Fed President Ester George said in an interview on Bloomberg Radio. In a separate interview on CNBC, she said hikes should be made gradually.

George is a voting member of the policy-setting Federal Open Market Committee, which is set to meet Sept. 20-21.

The Kansas City Fed president’s remarks come ahead of the highly anticipated retreat of economists and Fed members in Jackson Hole, Wyo., which will be headlined by Fed Chairwoman Janet Yellen.

The Dow Jones Industrial Average DJIA, -0.12% slips 28 points, or 0.2%, to 18,456, the S&P 500 index SPX, -0.15% declined about 3 points, or 0.2%, at 2,172. The Nasdaq Composite COMP, -0.16% gave up 10 points, or 0.2%, to 5, 207.

Ultraloose monetary policy has been supportive of stocks multiyear rise and investors have been worried that rate tightening might result in a stock-market drop.

Meanwhile, weekly jobless benefits claims fell to 261,000, showing that fewer Americans are losing their jobs as summer nears an end. Plus, U.S. durable-goods orders jumped 4.4% in July.

Both economic reports may be read as providing fodder for a resumption of interest rate increases by the Fed, which has been stalled since its last hike in December.

Thursday’s moves come after a downbeat trading day on Wednesday, when the S&P 500 and the Dow industrials finished at their lowest levels since early August. The selloff came as health-care shares tumbled following outrage over a price hike for Mylan Inc.’s MYL, +3.64% EpiPens, which are widely used to treat anaphylactic shock.

Shares of Mylan were up 4.2% on Thursday as the company said that it would immediately aim to cut costs of its lifesaving medication.

Read: How Hillary Clinton crushed another rally in biotech

All eyes on Jackson Hole: Wall Street will look to Jackson Hole and Yellen’s comments to provide clarity on the path for rates. Yellen is set to speak at 10 a.m. Eastern Time, and markets are likely to remain becalmed until then, analysts said.

“Markets are incredibly quiet this August (in sharp contrast to last year), so investors are latching on to anything they can, which gives this meeting a lot more attention than it probably deserves,” said Neil Wilson, markets analyst at ETX Capital in a note.

Read: Existential threat looms over central bankers as they gather at Jackson Hole

“The big question on the table is whether the Fed is ready to raise rates in September. We can probably expect Yellen to signal the Fed’s confidence about the U.S. economy and this could drive up expectations it will pull the trigger in September, potentially pushing up [the dollar] and hitting gold in the short-term,” he added.

Read: Fed might raise interest rates despite market objections

The ICE Dollar Index DXY, -0.13% was down 0.1% on Thursday at 94.695, while gold GCZ6, -0.40% traded down 0.5% at $1,323.60.

According to the CME FedWatch tool, markets are currently pricing in a 1-in-5 probability of a September rate increase.

Eight central bankers, including Fed governor Lael Brainard and New York Fed President William Dudley, are expected to meet activist group Campaign for Popular Democracy’s Fed Up Campaign to answer questions about monetary policy on Thursday.

Economic news: At 9:45 a.m. Eastern, a preliminary reading on the services purchasing managers index for August is due from Markit.

http://www.marketwatch.com/story/wall-street-set-for-losses-as-yellen-speech-draws-closer-2016-08-25