Stock futures were mostly lower on Wednesday on day two of Federal Reserve Chair Janet Yellen's testimony to Congress.
S&P 500 futures were 0.24% lower, Dow Jones Industrial Average futures were flat, and Nasdaq futures slipped 0.15%.
Yellen will address the House of Representatives on Wednesday, a day after delivering her semi-annual monetary policy testimony before the Senate Banking Committee. Yellen played the part of both dove and hawk in her remarks on Capitol Hill Tuesday, reiterating that rate hikes would be gradual but pointing out that it would be "unwise" to wait too long to hike again.
Market expectations for a rate hike at next month's meeting remain slim, but the outlook for the rest of the year is murkier. The Fed has expressed a more hawkish lean in recent months as inflation trends toward the central bank's 2% target and the U.S. economy nears full employment.
"Regarding the outlook for monetary policy, we view her remarks as indicating a low probability of a rate hike in March," Barclays analysts wrote in a note. "We see it as consistent with 'a few' rate increases this year that the chair referenced in her January speech and the committee projected in December."
Futures indicate markets expect a 43% chance of at least three hikes this year, according to CME Group. The chances of at least three moves in 2017 sat at 33% on Monday.
Retail sales in the U.S. increased by 0.4% in January, slowing slightly from a 0.6% increase a month earlier. Analysts estimated sales to increase by 0.1%. Excluding autos and gas, sales rose 0.7%, smashing consensus of 0.3% growth.
Consumer prices rose in January, another sign inflation is heating up. The consumer price index climbed by 0.6% in January, double estimates, and increased by 2.5% over the past 12 months. Excluding food and energy, core prices rose by 0.3%, higher than a target of 0.2%.
Industrial production in the U.S. showed an unexpected decline in January. The measure fell by 0.3% to a reading of 104.6 in January, worse than an expected flat reading. Production rose 0.8% in December.
Manufacturing conditions in the New York region significantly improved in February, according to the Empire State Manufacturing Index. The index increased to 18.7 in February from 6.5 in January.
Boston Fed President Eric Rosengren will deliver the keynote speech at the New York Association Economics Luncheon on Wednesday, Philadelphia Fed President Patrick Harker will discuss the economic outlook at La Salle University, and New York Fed President William Dudley will speak at the Cornell College of Business Annual New York City Prediction Event.
Cigna (CI - Get Report) and Anthem (ANTM - Get Report) called off a proposed merger. Cigna terminated the merger agreement and has asked Anthem to pay a $1.85 billion reverse termination fee. Cigna is requesting an additional $13 billion in damages.
Fortress Investment Group (FIG) rocketed 28% higher after SoftBank Group agreed to buy the asset manager in a deal worth $3.3 billion. Fortress shareholders will receive $8.08 a share, a 39% premium to the closing price on Monday.
Billionaire investor Warren Buffett increased his stake in Apple (AAPL - Get Report) during the fourth quarter. Buffett's Berkshire Hathaway (BRK.A - Get Report) holding company reported owning 57.4 million shares of Apple as of Dec. 31, up from 15.2 million shares of the tech giant at the end of the third quarter. Berkshire Hathaway's stake is now worth about $7.74 billion. Apple shares closed Tuesday at a record for the second day in a row.
Berkshire Hathaway also added to all of its airline investments. At the end of 2016, Berkshire held 45.5 million shares of American (AAL) , 60 million shares of Delta (DAL - Get Report) , 43.2 million shares of Southwest (LUV - Get Report) and nearly 29 million shares of United Continental (UAL - Get Report) .
Fossil Group (FOSL - Get Report) tanked nearly 20% after a disappointing quarter ravaged by currency exchange woes. The accessories maker also guided for a weak full year and said "several factors will cause volatility," primarily foreign exchange and restructuring charges. Fossil said it anticipates full-year sales in a range of a 6.5% drop to breakeven and for adjusted earnings of $1 to $1.70 a share. Analysts anticipate full-year earnings of $1.73 a share.
The weak quarter and guidance prompted Wells Fargo to downgrade Fossil to underperform from market perform. Analysts said they had concerns over the company's wearables business, particularly in light of weaker-than-expected sales in the fourth quarter. Sales weakness came in spite of "a much-hyped push in wearables (that was three years in the making)."
PepsiCo (PEP - Get Report) was little changed after topping analysts' estimates on its top- and bottom-lines over its recent quarter. Fourth-quarter earnings fell to 97 cents a share from $1.17 a share in the year-ago quarter, but came in at $1.20 a share when excluding one-time charges. Analysts anticipated adjusted earnings of $1.16. Sales rose by 5% to $19.52 billion, exceeding consensus of $4.7 billion. Frito-Lay North America sales increased 10%, while North America beverage sales rose 8%. Pepsi anticipates fiscal 2017 adjusted earnings of $5.09 a share, falling short of $5.16 consensus.