Investing.com -- U.S. stocks fell broadly on Wednesday halting an extended rally, as Federal Reserve chair Janet Yellen moved global markets by firmly placing a December interest rate hike on the table.
In testimony before the House Financial Services Committee on Wednesday morning, Yellen reiterated that the Federal Open Market Committee could raise short-term interest rates at its December meeting if it sees continued improvement in the economy and labor market over the next several weeks. Yellen emphasized that the timing of lift-off is critical to ensure a gradual move upward on a long-term basis.
"The committee does feel that moving in a timely fashion if the data and outlook justify such a move is a prudent thing to do because we will be able to move at a more gradual and measured pace," Yellen said in her testimony. "We fully expect that the economy will evolve in such a way that we can move at a very gradual pace and of course after we do so we will be watching very carefully whether our expectations are realized."
The Dow Jones Industrial Average and NASDAQ Composite index still hovered near multi-month highs in spite of the mild losses. The Dow fell 50.57 or 0.28% to 17,867.58, while the NASDAQ lost 2.65 or 0.05% to 5,142.48, retreating from near-record highs. A rate hike is viewed as bearish for the major indices, as investors exit their positions in equities in favor of higher yields in bonds.
The S&P 500, meanwhile, dropped by 7.48 or 0.35% to 2,102.31, as eight of 10 sectors closed in the red. Stocks in the Energy, Basic Materials and Consumer Services sectors lagged, while stocks in the Utilities and Technology industries led. The S&P 500 remains less than 2% from reaching an all-time record high.
The top performer on the Dow was Merck & Company Inc (N:MRK), which added 0.34 or 0.62% to 55.45. Merck finished just ahead of Visa Inc (N:V), which inched up to 78.24. Visa nearly finished as the biggest gainer on the Dow for the second consecutive session, following its $23.4 billion acquisition of its Visa Europe subsidiary earlier in the week. The worst performer was UnitedHealth Group Incorporated (N:UNH), which fell 3.08 or 2.62% to 114.58.
The biggest gainer on the NASDAQ was Tesla Motors Inc (O:TSLA), which surged 22.72 or 10.90% to 231.07. It came one day after the California-based electric car manufacturer reported lower than expected losses and adjusted its full-year guidance for vehicle deliveries. Tesla now expects to deliver 50 to 52,000 vehicles by year's end, down from previous estimates of 50 to 55,000 by the completion of 2015. The worst performer was Keurig Green Mountain Inc (O:GMCR), which plunged 3.93 or 7.17% to 50.91. Shares in Keurig, one of the world's largest coffee companies, are down by more than 65% over the last year.
The top performer on the S&P 500 was Range Resources Corporation (N:RRC), which soared 3.15 or 10.16% to 34.14, after the shale gas company announced that it is selling its natural gas operations in the Nora field of Southwestern Virginia for $875 million. Shares in Range Resources (N:RRC) are still down by more than 55% this year. The worst performer was Motorola Solutions Inc (N:MSI), which plummeted 6.60 or 9.25% to 64.76, after its earnings last quarter fell below analysts' expectations.
On the New York Stock Exchange, declining issues outnumbered advancing ones by a 1,845 to 1,226 margin.