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Portfolio > Economy & Markets

U.S. index futures little changed as Yellen sees 2015 rate rise

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(Bloomberg) — U.S. stock-index futures were little changed after Federal Reserve Chair Janet Yellen said prospects are good for further labor market improvement, keeping the central bank on track for an interest rate increase in 2015.

Bank of America Corp. advanced 2.7 percent after its quarterly profit more than doubled as legal expenses declined. Celgene Corp. jumped 8 percent after raising its annual profit forecast, and agreeing to acquire Receptos Inc. for $7.2 billion. Receptos soared 11 percent. Delta Air Lines Inc. lost 2.5 percent amid a weaker outlook on a measure of revenue.

Standard & Poor’s 500 Index E-mini contracts expiring in September added less than 0.1 percent to 2,102.50 at 9:01 a.m. in New York, after the underlying index posted its longest winning streak since January. Contracts on the Dow Jones Industrial Average gained 3 points, or less than 0.1 percent, to 17,964.

“If the economy evolves as we expect, economic conditions likely would make it appropriate at some point this year to raise the federal funds rate target,” Yellen said in testimony prepared for delivery today before the House Financial Services Committee in Washington. Fed officials expect growth “to strengthen over the remainder of this year and the unemployment rate to decline gradually.”

While a strengthening U.S. economy and waning risks from Greece and China are keeping the Fed on track for a rate increase this year, policy makers have emphasized that the pace of subsequent increases would be gradual. The Fed is likely to make its first move in September, according to 76 percent of 51 economists surveyed by Bloomberg from July 2 to July 8.

Producer prices

Data today showed wholesale prices in the U.S. climbed more than forecast in June as the cost of fuel picked up. The 0.4 percent increase in the producer-price index followed a 0.5 percent gain in May, according to Labor Department figures. Costs declined 0.7 percent over the past 12 months. A separate report is forecast to show industrial production forecast rose 0.2 percent in June, after an unexpected slump in May.

The S&P 500 fell as much as 4 percent from its all-time high, and has since recovered to trade within 1 percent of its record set in May as the Greek crisis neared a resolution and China shares stabilized. The benchmark gauge and the Dow have risen at least 3 percent in four days.

In Greece, the parliament votes Wednesday on a package of reforms aimed at getting more aid. Prime Minister Alexis Tsipras is trying to drum up support for the agreement that’s sparked a revolt in his own party. Complicating matters is the International Monetary Fund’s claim that Greece needs debt relief “far beyond” what European creditors have been willing to consider, including possibly deep haircuts on its debt.

Netflix Inc. and Intel Corp. are among eight S&P 500 companies reporting quarterly results on Wednesday. Analysts project earnings for members of the gauge dropped 6.4 percent in the second quarter.


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