US financials climb, utilities slip with Fed policy in focus

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After two consecutive record setting days, the US equities market posted a split performance on Tuesday: Financial stocks rallied and utilities pulled back as investors digested remarks from Federal Reserve chief Janet Yellen.

The S&P 500 edged lower by 0.1 per cent to 2,325.7, while the Dow was 0.01 per cent higher at 20,415.6. Meanwhile, the Nasdaq Composite was down 0.2 per cent to 5,752.92.

Dividend-paying utilities and real estate sectors were the hardest hit sliding 1.1 per cent and 1.3 per cent respectively. Meanwhile, financials, which benefit in a higher interest rate environment led the S&P 500 rising 0.7 per cent.

In her prepared remarks Ms Yellen played down expectations of a March rate rise and signalled “considerable” uncertainty over US fiscal policy. However, she also said that it would be “unwise” to wait too long before adding to the December 2016 rate increase.

Investors will also be watching to see if Ms Yellen will be grilled about the end of balance sheet reinvestment during the Q&A.

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