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Sep 25 2015

Yellen comments seen as a positive, Nike rallies

Market Recap 09/24/15:

U.S. stocks fell in a volatile session on Thursday, as a lowered outlook from industrial bellwether Caterpillar (CAT) underlined investor concerns about the strength of the economy and what impact growth levels would have on corporate results. Healthcare and biotech stocks were also lower, dropping for their fifth straight session, a selloff spurred by recent comments against the sector by Democratic Presidential candidate Hilary Clinton. With the day’s decline, volatility levels spiked above their long-term average, as measured by the CBOE Volatility index, a metric for investor caution.

Looking ahead:

U.S. stock index futures rose on Friday, lifted by comments from Fed Chair Janet Yellen that were released after the market closed on Thursday. In the statement, Yellen reiterated that an interest rate hike was likely to occur by the end of the year. While the market’s low-rate environment has contributed to its gains over the past few years, an increase in rates would indicate that the economy is finally strong enough to withstand higher rates. Equities have struggled since the Fed last week decided against raising rates at its September meeting, citing slowing growth. The next opportunity for the Fed to raise rates will be at its December meeting. Also contributing to the rise in futures was Nike (NKE), a Dow component that late Thursday reported better-than-expected earnings, a positive sign for the consumer discretionary sector. Make sure you don’t miss this week’s Money Matters with guest host Oliver Pursche, which airs Sundays at 11 on WOR710. Click hereto watch Mr. Pursche’s appearance on yesterday’s CNBC program Closing Bell. Visit our website for more details.