Investing.com - U.S. stock indices finished Tuesday mixed, boosted by bank earnings though watered down by Federal Reserve Chair Janet Yellen's concerns that stock valuations have grown a little bubbly.
At the close of U.S. trading, the Dow 30 rose 0.03%, the S&P 500 index fell 0.19%, while the NASDAQ Composite index dropped 0.54%.
The Volatility S&P 500 index, which measures the outlook for market volatility, was up 1.18% at 11.96.
J P Morgan Chase & Co (NYSE:JPM) and Goldman Sachs Group Inc (NYSE:GS) released upbeat earnings earlier, one session after Citigroup Inc (NYSE:C) did likewise and two sessions after Wells Fargo & Company (NYSE:WFC) beat expectations.
Financial stocks applauded the news, though concerns that momentum stock valuations have grown too high took their toll on social media and high-flying stock classes.
Fed Chair Janet Yellen told the Senate Banking Committee earlier that the U.S. economy continues to improve but added that the recovery is not yet complete. She said that considerable slack still remains in the labor market and wage growth remains weak.
Yellen reiterated that rates are likely to remain on hold for a considerable period after the bank’s quantitative easing program ends, though her observation that small-cap, biotech and other momentum stock valuations appear "stretched" sent stocks falling, leaving investors to conclude that interest rates could rise sooner than later if the labor market improves.
Mixed U.S. data also allowed for a lackluster close.
The Commerce Department reported that U.S. retail sales rose just 0.2% in June, below forecasts for a 0.6% increase. Retail sales for May, however, were revised up to 0.5% from a previously reported 0.3%.
A separate report showed that manufacturing activity in New York state rose to a four-year high this month. The Empire state manufacturing index rose to 25.6 in July from 19.3 in June. Analysts had expected the index to decline to 17.0.
Leading Dow Jones Industrial Average performers included J P Morgan Chase & Co (NYSE:JPM), up 3.62%, Goldman Sachs Group Inc (NYSE:GS), up 1.30%, and AT&T Inc (NYSE:T), up 1.10%.
The Dow Jones Industrial Average's worst performers included Johnson & Johnson (NYSE:JNJ), down 2.02%, International Business Machines (NYSE:IBM), down 0.77%, and Walt Disney Company (NYSE:DIS), down 0.69%.
European indices, meanwhile, ended the day lower.
After the close of European trade, the DJ Euro Stoxx 50 fell 0.84%, France's CAC 40 fell 1.03%, while Germany's DAX fell 0.65%. Meanwhile, in the U.K. the FTSE 100 fell 0.53%.
On Wednesday, the U.S. is to release reports on producer price inflation and industrial production. Meanwhile, Fed Chair Janet Yellen is to testify on monetary policy before the House Financial Services Committee.