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S&P 500, Nasdaq dip on Yellen's comments; Apple up late


NEW YORK - U.S. stocks pulled back on Tuesday after Federal Reserve Chair Janet Yellen and her fellow Fed policymakers raised concerns about "substantially stretched valuations" in some sectors.

But the major U.S. stock indexes closed well above session lows with the Dow Jones industrial average erasing all of its earlier losses.

In the monetary policy report accompanying her congressional testimony, Yellen said that "equity valuations of smaller firms as well as social media and biotechnology firms appear to be stretched."

But the stock of Johnson & Johnson, another Dow component, fell 2 percent to $103.28. The diversified healthcare and consumer products company reported higher-than-expected quarterly results on sizzling sales of Olysio, its new treatment for hepatitis C. The company, however, cautioned that the new pill's sales will lose momentum later this year as new rivals come to market.

S&P 500 companies' profits are expected to grow 5.2 percent in the second quarter, according to Thomson Reuters data, down from the 8.4 percent growth forecast at the start of April. Revenue is seen up 3.2 percent.

About 6 billion shares traded on U.S. exchanges, above the 5.32 billion average for the month to date, according to data from BATS Global Markets.