Business

US markets in muted response to Yellen

NYSE traders Image copyright Reuters

(Close): Wall Street markets were mixed on Friday after a speech by Federal Reserve head Janet Yellen indicated that an increase in interest rates may be coming soon.

At the annual gathering of central bankers at Jackson Hole, Wyoming, Ms Yellen said the case for a rate hike had "strengthened".

The Dow Jones fell 0.3% to 18,395.4 points, while the wider S&P 500 index dropped 0.2% to 2,169.04.

The Nasdaq climbed 0.1% to 5,218.92.

"In light of the continued solid performance of the labour market and our outlook for economic activity and inflation, I believe the case for an increase in the federal funds rate has strengthened in recent months," Ms Yellen said.

Banks, which tend to benefit from higher interest rates, saw their shares rise slightly.

JP Morgan was up 0.2% and Citigroup rose 0.8%.

Verizon Communications was the main loser on the Dow, falling 1.3%.

Figures from the US Commerce Department released earlier in the day indicated the US economy grew more slowly than initially estimated in the second quarter of the year.

Revised figures showed that the economy grew at an annual pace of 1.1% in the quarter, slightly slower than the first estimate of 1.2%.