The S&P 500 fell today after reaching an all-time high yesterday as investors calmly weighed comments from central bank leaders for clues to monetary policy amid rising geopolitical tension.
By Paolo Palazzi-Xirinachs
Friday, August 22, 2014
Equities fluctuated after Federal Reserve Chair Yellen said in a speech at the Kansas City Federal Reserve’s annual economics conference in Jackson Hole, Wyoming, that slack remains in the labor market even after gains made during the five years of economic recovery. European Central Bank President Mario Draghi called for governments to do more to help the euro-area economy.
Taking all this into account, the S&P 500 fell 0.2% to 1,988.40 at 4 p.m. in New York. The benchmark gauge ended the week with a 1.7% gain, its biggest advance since April. The Dow Jones also lost 38.34 points, or 0.2% to 17,001.15, while the Nasdaq added 0.1% to its highest level since 2000. In June, the ECB introduced targeted long-term refinancing operations to improve bank lending in the non-financial private sector.
Three rounds of Fed stimulus and better-than-projected corporate earnings have helped the S&P 500 almost triple since its low in March 2009. The S&P 500 has not had a decline of 10% in almost three years. It trades at 17.8 times the reported earnings of its companies, near the highest level since 2010.
Stocks dropped earlier in the session after NATO said it has seen large transfers of advanced weapons and sees an “alarming build-up” of Russian forces near Ukraine. Trucks carrying what Russia says is humanitarian aid crossed the border into Ukraine, whose government said the move amounted to an invasion because the convoy moved without its consent. But Russia is invading under the cover of the aid trucks, according to Valentyn Nalyvaychenko, the head of Ukraine’s security council.
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