U.S. Stocks Little Changed Amid Greek Bailout Debate, Yellen

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Yellen: Rate Hike Is Likely This Year

U.S. stocks were little changed, halting their longest winning streak since January, as Greek lawmakers debated a bailout and Janet Yellen signaled the Federal Reserve is on track to raise interest rates this year.

Transocean Ltd. and Consol Energy Inc. fell at least 3.9 percent as oil dropped. Bank of America Corp. gained 3.2 percent after its quarterly profit more than doubled. In late trading, Netflix Inc. rallied as subscriptions soared, and Intel Corp. rose after predicting sales may exceed analysts’ estimates.

The Standard & Poor’s 500 Index slipped 0.1 percent to 2,107.40 at 4 p.m. in New York, after the benchmark added 3 percent over the previous four sessions. The Dow Jones Industrial Average lost 3.41 points, or less than 0.1 percent, to 18,050.17. The Nasdaq Composite Index declined 0.1 percent. About 6.2 billion shares traded hands on U.S. exchanges Wednesday, 4 percent below the three-month average.

“A rate hike has been baked into prices for some time already,” said Bruce Bittles, chief investment strategist at Milwaukee-based Robert W. Baird & Co., which oversees $110 billion. “There’s going to be more to Yellen’s decision-making than just the labor markets. Going forward, earnings will be important, particularly for a market that’s richly valued.”

Equities earlier erased an advance as riot police fired tear gas to disperse crowds gathered in Syntagma Square, across the road from the Greek parliament. Lawmakers are due to vote on the bailout bill, which will endorse tax increases and spending cuts, by about midnight in Athens.

Yellen Testimony

“If you take how far we’ve come in the last three days, throw a riot on TV and toss in the fact that it appears that Greek parliament is still debating this package -- that’s enough to hit the market late in the afternoon on a quiet day.” said Michael Antonelli, an institutional equity sales trader and managing director at Robert W. Baird & Co. in Milwaukee.

Meanwhile, a strengthening U.S. economy and waning risks from Greece and China are keeping the Fed on track for a rate increase this year. Fed Chair Yellen, in testimony delivered today before the House Financial Services Committee in Washington, again emphasized that the timing of the first rate rise is less important than the subsequent path of increases, which she said would be gradual.

Forecasts issued by the Federal Open Market Committee in June implied two quarter-point rate rises this year, followed by a shallower path of increases than officials predicted in March.

Data Watch

Data today showed wholesale prices in the U.S. climbed more than forecast in June as the cost of fuel picked up. A separate report showed factory output was little changed in June for a second month, held back by a decline in motor vehicle production.

The Fed’s latest Beige Book report today on regional conditions indicated the economy kept expanding from mid-May through June, despite mixed consumer spending and somewhat less optimism among respondents.

The S&P 500 fell as much as 4 percent from its all-time high, and has since recovered to trade within 1 percent of its record set in May as the Greek crisis neared a resolution and China shares stabilized. The benchmark gauge and the Dow rose at least 3 percent over the previous four sessions.

Citigroup Inc., Goldman Sachs Group Inc. and Google Inc. are among S&P 500 companies reporting quarterly results this week. Analysts project earnings for members of the gauge dropped 6.4 percent in the second quarter.

Energy Slumps

Netflix surged 9.4 percent as of 5:12 p.m. after saying growth in international audiences boosted subscriptions to its Internet TV service. The stock has been the best performer in the S&P 500 this year. Intel added 2.7 percent, as the biggest maker of semiconductors predicted third-quarter sales that may exceed analysts’ predictions.

The Chicago Board Options Exchange Volatility Index slipped 1.1 percent Wednesday to 13.23. The gauge known as the VIX fell for a fourth day, its longest streak since April.

Energy shares declined the most among the S&P 500’s 10 main groups as oil prices retreated. Diamond Offshore Drilling Inc. and Transocean fell at least 3.9 percent. Ensco Plc lost 5.6 percent to a more than 13-year low, while Consol Energy tumbled 5.7 percent to its lowest in more than six years. Chevron Corp. sank 1.4 percent, its first drop in five sessions.

Allegheny Technologies Inc. fell 7 percent, the most since 2012, after the metal producer said it would post a surprise second-quarter loss amid deteriorating demand, slumping prices for stainless steel and operational problems.

Banks Roll

Yum! Brands Inc. sank 3 percent as quarterly sales missed estimates. The fast-food company’s beleaguered China segment remained mired in a slump.

Financial shares were the top performers as banks in the benchmark climbed for a fifth consecutive day, the longest winning streak in three months. U.S. Bancorp gained 3.8 percent to a 2015 high after posting a profit that matched analysts’ estimates as expenses declined and commercial lending accelerated.

Bank of America added 3.2 percent, its best gain in five months, as lower costs and a rebound in the mortgage business boosted quarterly profits.

Macy’s Jumps

Celgene Corp. jumped 7 percent to a record after raising its profit forecast, and agreeing to acquire Receptos Inc. for $7.2 billion. Biotechnology companies bolstered the health-care group for a second day. The Nasdaq Biotechnology Index climbed 0.7 percent, extending its all-time high and capping its best five-day rise since October. Vertex Pharmaceuticals Inc. rose 3.2 percent, while Amgen Inc. gained 0.7 percent.

Macy’s Inc. jumped 7.9 percent, the most since Nov. 2013, to a record. Starboard Value Chief Executive Jeff Smith said at a conference in New York that his activist investing firm has taken a position in the retailer, and he suggested Macy’s could separate its real estate from its retail business. In a statement, Macy’s said it’s currently evaluating real-estate ownership structures.

CSX added 1 percent after a second-quarter profit that exceeded analysts’ estimates in the midst of a slump in cargo. The railroad benefited from lower fuel prices and expense cuts.

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