Yellen says that economic surprises could change plans Nike advances after quarterly profit beats expectations Share on Facebook Share on Twitter U.S. stock-index futures advanced as Federal Reserve Chair Janet Yellen reiterated that the central bank is on track to raise interest rates this year, indicating its confidence in the economy. Standard & Poor’s 500 Index E-mini contracts expiring in December jumped 1.2 percent to 1,943 at 7:31 a.m. in New York. Uncertainty on the trajectory of borrowing costs weighed on the S&P 500 in recent days, with shares sliding to an almost three-week low on Thursday. Dow Jones Industrial Average futures rose 229 points, or 1.4 percent, to 16,328 today. “Saying that a rate increase this year is in the making is restoring a bit of confidence in the market,� said Otto Waser, chief investment officer at R&A Research & Asset Management AG in Zurich. “The Fed, and particularly Mrs Yellen, created some uncertainties by not raising rates and telling markets that they are worried about the global economy. We are generally not fully convinced that the correction is over.� Speaking after markets closed yesterday, Yellen said the central bank is on course to raise interest rates this year, although she acknowledged that economic “surprises� could lead them to change that plan. The Fed held its fire on a hike last Thursday, saying it is considering spillover risks to the U.S. economy from global markets. Fed officials subsequently said a 2015 increase is still warranted. Traders are split on whether this will happen. They are pricing in about a 47 percent chance of a hike in December, and a 55 percent probability of liftoff in January. The Chicago Board Options Exchange Volatility Index, the measure of market turbulence known as the VIX, has closed above 20 for 24 straight sessions, the longest stretch since June 2012. The gauge rose 6.1 percent Thursday to 23.47. Investors will also look to economic data today, with a preliminary measure of U.S. services activity in September forecast to show a slowdown in expansion from the previous month. Separate reports will confirm the world’s biggest economy grew 3.7 percent in the second quarter, while consumer sentiment improved this month, according to economist forecasts. Nike Inc. rose 8 percent in premarket New York trading after posting better-than-forecast fiscal first-quarter profit. Circuit maker Marvell Technology Group Ltd. added 6 percent after announcing it will cut 17 percent of its workforce. BlackBerry Ltd. fell 6.8 percent after reporting a wider second-quarter loss than analysts estimated.

Source