WASHINGTON (dpa-AFX) - After seeing considerable volatility early in the session, stocks moved mostly lower over the course of the trading day on Friday. The major averages all moved to the downside on the day, partly offsetting the strength seen in the previous session.
The Nasdaq slid 138.93 points or 0.5 percent to 26,402.42 and the S&P 500 fell 19.23 points or 0.3 percent to 7,711.76. The narrower Dow posted a more modest loss, edging down 9.45 points or less than a tenth of a percent to 53,559.99.
Despite the pullback on the day, the major averages all moved higher for the week. The Nasdaq advanced by 0.9 percent, while the Dow and the S&P 500 both climbed by 0.5 percent.
The weakness that emerged on Wall Street came as Federal Reserve Chairman Kevin Warsh's first speech at the Jackson Hole economic symposium was seen as having a hawkish tilt.
As widely expected, Warsh began his remarks by highlighting his aversion to providing 'forward guidance,' noting his 'long-time discomfort with early pronouncements of future policy decisions.'
Warsh argued that oversharing policy deliberations and overcommitting to future decisions can lead markets, businesses, and households astray.
However, Warsh's comments about the current state of the economy may have provided some insight into his views about the outlook for interest rates.
The Fed chief noted people may well be concerned about possible future labor disruptions but said he believes labor markets are currently consistent with full employment.
Instead, Warsh said the numbers are more concerning with regard to the price-stability side of the Fed's dual mandate, with the annual rate of growth by the central bank's preferred measure of inflation standing at 3.7 percent
'None of these measures are perfect, but they all tell a similar story: Inflation is running above our 2 percent target,' Warsh said. 'So the Fed's predominant focus right now should be on prices.'
He added, 'We must be confident that underlying inflation is moving to our objective, clearly and at sufficient speed. Otherwise, we have work to do. That's our job . . . our mandate . . . and our charge to keep.'
Following Warsh's remarks, the chances the Fed will raise interest rates by a quarter point next month have jumped to 57.7 percent from just 35.4 percent yesterday, according to CME Group's FedWatch Tool.
Sector News
Gold stocks moved sharply lower along with the price of the precious metal, resulting in a 3.9 percent nosedive by the NYSE Arca Gold Bugs Index.
Substantial weakness was also visible among semiconductor stocks, as reflected by the 3.5 percent plunge by the Philadelphia Semiconductor Index.
Shares of Nvidia (NVDA) saw a significant pullback, with the AI giant tumbling by 4.6 percent after spiking by 8.7 percent on Thursday.
Networking, biotechnology and computer hardware stocks also saw considerable weakness, while retail stocks showed a strong move to the upside.
Shares of Gap (GPS) soared by 12.9 percent after the clothing and accessories retailer reported better than expected second quarter earnings and announced the appointment of Michael Francis as President and Chief Executive Officer of Old Navy.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Friday. Japan's Nikkei 225 Index climbed by 0.4 percent, while China's Shanghai Composite Index edged down by 0.1 percent and South Korea's Kospi slump by 1.8 percent.
Meanwhile, the major European markets all moved to the upside on the day. While the French CAC 40 Index jumped by 1 percent, the German DAX Index advanced by 0.8 percent and the U.K.'s FTSE 100 Index rose by 0.3 percent.
In the bond market, treasuries came under pressure in reaction to Warsh's remarks. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, shot up 4.8 basis points to 4.720 percent.
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