U.S. stocks gave up gains to trade narrowly mixed Friday as the yen held near highs not seen against the U.S. dollar since October 2014.
The S&P 500 erased year-to-date gains in afternoon trade as the major averages temporarily turned lower on the day. The Dow Jones industrial average struggled for gains after earlier adding 152 points.
“Certainly yesterday we traded with the yen strengthening and today we’re doing it again,” said Peter Boockvar, chief market analyst at The Lindsey Group.
The yen is “very symbolic. It’s a sign a central bank is losing control. They’re losing control of markets. Markets are losing faith in their abilities,” he said.
The Japanese yen reversed an attempt to come off recent highs against the U.S. dollar, trading near 108.25 yen against as of 3:17 p.m. ET. The yen recently hit fresh highs against the greenback going back to October 2014, putting pressure on stocks.
“We were on an epic run higher and this is the pullback we get?” said John Caruso, senior market strategist at RJO Futures.
As of afternoon trade Friday, the major U.S. averages were on pace for a weekly decline of about 1 percent or more with the Dow Jones industrial average tracking for its worst week since the one ended Feb. 12.
The U.S. dollar index traded slightly lower with the euro above $1.140.
The Dow Jones industrial average traded about 15 points higher after earlier adding more than 150 points. UnitedHealth and Nike were the greatest contributors to declines in the Dow, while Chevron was among the top contributors to gains.
Traders also noted some pressure on stocks after several downward revisions to first-quarter GDP estimates following wholesale inventories’ 0.5 percent decline in February, the sharpest decline since May 2013, Reuters reported.
The Atlanta Fed’s GDPNow model said the U.S. economy was on track to grow 0.1 percent in the first quarter, down from the previous 0.4 percent estimate.
WTI settled near session highs, up $2.46, or 6.6 percent, at $39.72 a barrel, in its biggest daily gain since Feb. 12. U.S. crude oil futures gained 7.96 percent for the week. The oil rig count fell by 8, hitting its lowest level since 2009.
“The fact oil’s up more than 5 percent today and it’s being defended for the week helps the risk-on crowd pile into stocks,” said Adam Sarhan, CEO of Sarhan Capital.
The Dow transports traded 1 percent higher after earlier jumping more than 2 percent, on pace to snap a six-day losing streak, while the Russell 2000 was up about a third of a percent after earlier rising 1 percent. Both indexes are still on pace for a weekly loss of more than 1 percent.
“I think the Fed (speakers) are basically just comforting to the market,” said Peter Cardillo, chief market economist at First Standard Financial.
In a panel discussion with three former Fed chairs late Thursday, Fed Chair Janet Yellen said she “certainly wouldn’t describe this as a bubble economy.”
“That’s basically flashing a green light for investors,” Cardillo said, noting the comments could be interpreted as indicating fair valuation in stocks and no potential recession in the U.S. economy.
Early Friday morning New York Fed President William Dudley said a cautious, gradual approach to rate hikes is appropriate. He noted lingering external risks to the U.S. economy, despite some strength and signs of inflation domestically.
The Fed comments helped support a risk-on tone in markets in morning trade.
Gold traded mildly lower before turning higher in midday trade. Treasury yields were.
U.S. stocks closed lower Thursday, with the Dow losing 174 points. Stocks gained Wednesday, following the first triple-digit decline in the Dow since March 8 on Tuesday.
“The vehemence of the bounce after very, very small pullbacks in the price that shows … buyers remain under the market for now,” Sarhan said.
European stocks closed up about 1 percent or more, with bank stocks outperforming.
Asian stocks were mixed, with the Nikkei 225 and Hang Seng closing about half a percent higher while the Shanghai composite declined about 0.8 percent.
The S&P 500 traded up 6 points, or 0.29 percent, to 2,047, with energy leading seven sectors higher with consumer discretionary leading decliners.
The Nasdaq composite declined 1 point, or 0.03 percent, to 4,846.
The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, declined to trade near 15.4.
About four stocks advanced for every decliner on the New York Stock Exchange, with an exchange volume of 419 million and a composite volume of 1.960 billion in afternoon trade.
High-frequency trading accounted for 49 percent of April’s daily trading volume of about 7.00 billion shares, according to TABB Group. During the peak levels of high-frequency trading in 2009, about 61 percent of 9.8 billion of average daily shares traded were executed by high-frequency traders.
Gold futures for June delivery settled up $6.30 at $1,243.80 an ounce.