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Stocks Extend Modest Losses Ahead of Yellen Speech

NEW YORK (TheStreet) -- Stocks extended modest losses on Friday as investors awaited a speech from Federal Reserve Chair Janet Yellen and as the U.S. dollar spiked on stronger-than-expected consumer price inflation.

The S&P 500 was down 0.19% and the Dow Jones Industrial Average fell 0.32%. The Nasdaq gave up earlier gains, falling 0.04%. 

Yellen will share her views on the economic outlook in Providence, R.I., at 1 p.m. EDT. The speech comes only days after the Fed released minutes from its April meeting where most Fed officials considered it unlikely the central bank would lift interest rates in June. Click here for more.

"I'm really expecting more of the same," said Martin Jarzebowski, assistant vice president and portfolio manager at Federated Investors, in a call. "She will probably just echo a lot of the [April Fed minutes]."

The U.S. dollar spiked against a basket of international currencies, a response to signs the Fed will tighten interest rates as other major global economies introduce or show signs of furthering monetary stimulus. The rise in the dollar caused West Texas Intermediate to fall 1.2% to $60.02 a barrel.

A surprisingly strong core consumer price reading also made the case for an interest rate this year, according to a strategist. U.S. core consumer prices rose at a faster pace than expected in April. Headline CPI rose 0.1%, as expected, while core prices excluding energy and food spiked 0.3%, the fastest pace since January 2013. Core prices climbed on rising shelter and medical care costs. Economists had expected core CPI to increase 0.1%.

"The stability seen in core prices has to be encouraging for those on the Fed's board who see support for a rate hike later this year," said Dan Greenhaus, chief strategist at BTIG. "While much attention is paid to Fed President Evans' dovishness, core members including Janet Yellen and Bill Dudley appear to favor raising interest rates in 2015, however modestly that rate adjustment may be. Today's data plays into thought process."

Enterprise software stock Intuit (INTU - Get Report) was higher after the company beat third-quarter estimates and increased its expectations for subscribers to its QuickBooks Online program by the fourth quarter.

Aeropostale (ARO - Get Report) was lower after posting a first-quarter loss of 56 cents a share and revenue down 20% to $318.6 million. Both missed estimates. Comparable-store sales fell 11% compared to an expected 9.5% decline.

Hewlett-Packard (HPQ) posted mixed results, reporting earnings of 87 cents a share which beat by a penny, while revenue of $25.45 billion fell 7% and missed estimates.

The Fresh Market (TFM) earned 50 cents a share in its first quarter, a penny better than expected, though revenue of $462 million missed expectations by $11.8 million.

Gap (GPS) was lower after missing quarterly estimates on its top- and bottom-lines. The retailer earned 54 cents a share in its first quarter, 2 cents short of forecasts, while sales fell 3% to $3.66 billion and missed expectations by $90 million. Profitability was hit by a stronger dollar, supply delays in the U.S. and soft demand for its headline brand.

Deere (DE) was up more than 3% after reporting earnings of $2.03 a share, 48 cents higher than forecast. The heavy machinery manufacturer also raised its profit forecast, anticipating a stronger year in sales despite a pullback in the farm sector.

Campbell Soup (CPB) beat on the bottom-line in its third quarter, though revenue dropped 3.6% from a year earlier. Organic sales fell 1%.

BlackBerry (BBRY) shares were moving higher after the company launched a buyback program to repurchase 2.6% of the float and 2.2% of outstanding shares. At current levels, that equates to 12 million shares which would cost $126 million.

Time Warner Cable (TWC) shares jumped 3.4% on talk of a bidding war over the company. Controlling shareholder of Altice, Patrick Drahi, met with Time Warner Cable's CEO Rob Marcus earlier this week to discuss a cash-and-stock takeover, according to The Wall Street Journal. Charter (CHTR) is reportedly also talking to Time Warner Cable about an offer of greater than $170 a share. Click here for more.

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