Wednesday, August 24, 2016
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Market Digest Online THURSDAY, AUGUST 25, 2016: U.S. stocks closed lower on Wednesday, with health care shedding more than 1.5 percent, while investors eagerly awaited a speech from Federal Reserve Chair Janet Yellen. Stocks traded slightly lower for most of the session before health care and biotech began to slide. Yellen is scheduled to speak on the U.S. economy and monetary policy Friday at 11 a.m. ET against a backdrop of recent hawkish rhetoric from two of her top lieutenants, New York Fed President William Dudley and Fed Vice Chairman Stanley Fischer.

"What's amazing is we've recently geared up for something big from the Fed, and then there's a big nothing," said JJ Kinahan, chief strategist at TD Ameritrade. He also said he expects Yellen's speech to be a non-event.

Key Private Bank's McCain said investors are hoping Yellen does not say too much that could move the market. "It's a boring time in the markets and investors are hoping it stays boring because prices keep going up," he said.

"This is still a market with a lot of risk," said James Abate, CIO at Centre Funds. He noted that, because sovereign yields are so low, investors have turned to equities in their search for yield. The main problem here, Abate said, is "10 years of income can be wiped out in two days."

"Look at Bristol-Myers and Corrections Corp. These are names that were bought mainly for yield," he said. Both stocks are in bear market territory, or down at least 20 percent from their 52-week high.

Investors also watched oil markets, with U.S. crude settling 2.77 percent lower at $46.77 a barrel after the Energy Information Administration said U.S. crude stockpiles rose by 2.5 million barrels. On the data front, existing home sales for July fell 3.2 percent, more than expected. New home sales data, released Tuesday, reached their highest level in almost nine years.

The Dow Jones industrial average traded 65 points lower at 18,481, with UnitedHealth Group leading decliners and Nike the biggest riser. The S&P 500 fell 11 points to 2,175, with health care leading all sectors lower. The Nasdaq dropped 42 points to 5,217. About three stocks declined for every advancer at the New York Stock Exchange, with and exchange volume of 542 million and a composite volume of 2.663 billion. Gold futures for December delivery settled $16.40 lower at $1,329.70 per ounce.

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