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U.S. stocks open lower ahead of Yellen' s 2nd day of testimony

Xinhua, February 25, 2015 Adjust font size:

U.S. stocks opened narrowly lower on Wednesday as Wall Street was cautious ahead of another day of testimony by Federal Reserve Chair Janet Yellen.

The Fed would not raise rates before it finds confidence in the economic recovery, overcoming worries about the weak wages and the below-objective inflation, Yellen said in the first of her two-day Congressional testimonies Tuesday.

"If economic conditions continue to improve, as the committee anticipates, the committee will at some point begin considering an increase in the target range for the federal funds rate on a meeting-by-meeting basis," Yellen said.

Despite the Wall Street Journal' s valiant effort to paint Tuesday' s testimony by Yellen as an incremental step closer to tightening because she spoke mainly about the fact that the Fed will eventually raise rates, she was in fact very careful to stick to the script, said Chris Low Wednesday, an economist at FTN Financial, in a note.

Investors also eyed on housing data. Mortgage applications to purchase a home rose 5 percent on a seasonally adjusted basis for the week ending Feb. 20 from the previous week, the Mortgage Bankers Association reported early Wednesday.

On Tuesday, the S&P/Case-Shiller composite index of home prices in 20 cities increased by a greater-than-expected 4.5 percent in December from the same period last year, showing a slight uptick in home prices across the country.

Shortly after the opening bell, the Dow Jones Industrial Average dropped 14.84 points, or 0.08 percent, to 18,194.35. The S&P 500 was down 1.81 points, or 0.09 percent, to 2,113.67. The Nasdaq Composite Index shed 7.45 points, or 0.15 percent, to 4,960.67.

U.S. stocks rose Tuesday, with both the Dow Jones Industrial Average and the S&P 500 refreshing their record highs, as Yellen stressed that the Fed would continue to be patient on a rate hike. Endite