1st LD Writethru: U.S. stocks end slightly lower on Yellen's speech

U.S. stocks decreased after wavering in a tight range on Friday, as investors were digesting Fed Chair Janet Yellen's speech delivered in the afternoon.

The Dow Jones Industrial Average fell 53.72 points, or 0.29 percent, to 18,232.02. The S&P 500 lost 4.76 points, or 0.22 percent, to 2,126.06. The Nasdaq edged down 1.43 points, or 0.03 percent, to 5,089.36.

During a speech to the Greater Providence Chamber of Commerce, Rhode Island, Yellen said she expected the Fed to raise interest rates this year if the economy remains on track for her forecasts.

"If the economy continues to improve as I expect, I think it will be appropriate at some point this year to take the initial step to raise the federal funds rate target," she said.

But she stressed that the pace of increases will be gradual, and that it will take several years for rates to normalize.

On the economic front, the Consumer Price Index (CPI) for all urban consumers increased 0.1 percent in April on a seasonally adjusted basis, in line with market consensus, the U.S. Labor Department said Friday.

The core CPI (less food and energy) rose 0.3 percent in April, the biggest monthly increase in two years, lifting the year-over- year rate to 1.8 percent.

"Core prices have ranged from 1.6 percent to 2.0 percent since August 2012, and now sit directly in the middle of the range. Fed policymakers will be encouraged to see core prices holding up in the face of dramatic energy declines, confident that the trend is heading in the direction of their forecast," said Jay Morelock, an economist at FTN Financial, in a note.

During the speech, Yellen also repeated the Fed's two criteria for raising rates: continued improvement in labor market conditions and inflation moving back to 2 percent over the medium term. "We are not here yet," she said.

For the week, the Dow dipped 0.2 percent, and the S&P 500 increased 0.2 percent, while the Nasdaq was up 0.8 percent. Endite