* Yellen, Fed policymakers: Some U.S. stock valuations
* JPMorgan, Goldman shares rally after earnings
* Fund managers see stocks overvalued, buying anyway -BofA
* Dow up 0.03 pct; S&P 500 down 0.2 pct; Nasdaq off 0.5 pct
(Updates with Apple-IBM deal)
By Angela Moon
NEW YORK, July 15 U.S. stocks pulled back on
Tuesday after Federal Reserve Chair Janet Yellen and her fellow
Fed policymakers raised concerns about "substantially stretched
valuations" in some sectors.
But the major U.S. stock indexes closed well above session
lows with the Dow Jones industrial average erasing all of its
In the monetary policy report accompanying her congressional
testimony, Yellen said that "equity valuations of smaller firms
as well as social media and biotechnology firms appear to be
The Russell 2000 small-cap index dropped 1 percent and
the Global X Social Media ETF slid 1.1 percent.
Facebook shares tumbled 1.1 percent to $67.17. Twitter
Inc shares slid 1.1 percent to $37.88.
"These are the sub-industries that have caused a lot of
longtime stock watchers to scratch their heads," said Kim
Forrest, senior equity analyst at Fort Pitt Capital Group in
"Looking at some of these things and trying to figure out
their value, it felt like the 2000 Internet bubble all over
again," Forrest added.
The Dow Jones industrial average rose 5.26 points or
0.03 percent, to end at 17,060.68, not far below the record
closing high of 17,068.26 set on July 3.
The S&P 500 slipped 3.82 points or 0.19 percent, to
1,973.28, about 12 points below its record closing high of
1,985.44 set on July 3.
The Nasdaq Composite dropped 24.03 points or 0.54
percent, to close at 4,416.39.
According to the BofA Merrill Lynch Fund Manager Survey for
July, 61 percent of global asset managers are overweight
equities, the highest reading since early 2011, but 21 percent
see stock markets as overvalued, the highest reading since 2000.
BlackBerry's U.S.-listed shares plunged 4 percent
to $10.85 after the bell following news that International
Business Machines Corp will partner exclusively with
Apple Inc to sell iPhones and iPads loaded with
applications intended to serve corporate clients.
"This deal is a very targeted attempt by Apple with help
from IBM to focus on the enterprise corporate market, which has
really been the main business of Blackberry," said Tim Ghriskey,
chief investment officer at Solaris Group in Bedford Hills, New
After the bell, IBM's stock rose 1.9 percent and Apple
shares rose 1.3 percent.
Shares of Yahoo Inc rose 2.7 percent in
extended-hours trading after the Internet company reported a
decline in second-quarter net revenue.
During the regular session, shares of JPMorgan Chase & Co
jumped 3.5 percent to $58.27 and helped lift the Dow.
The stock rallied after JPMorgan, the biggest U.S. bank, when
ranked by assets, reported a drop in second-quarter profit,
although the profit exceeded the average analysts' estimate. The
bank also reported a decline in revenue, but the drop was not as
steep as JPMorgan had forecast in May.
Shares of Goldman Sachs Group Inc gained 1.3 percent
to $169.17 after the company reported a 5 percent increase in
second-quarter profit. Higher revenue from stock underwriting
helped Goldman's bottom line.
But the stock of Johnson & Johnson, another Dow
component, fell 2 percent to $103.28. The diversified healthcare
and consumer products company reported higher-than-expected
quarterly results on sizzling sales of Olysio, its new
treatment for hepatitis C. The company, however, cautioned that
the new pill's sales will lose momentum later this year as new
rivals come to market.
S&P 500 companies' profits are expected to grow 5.2 percent
in the second quarter, according to Thomson Reuters data, down
from the 8.4 percent growth forecast at the start of April.
Revenue is seen up 3.2 percent.
About 6 billion shares traded on U.S. exchanges, above the
5.32 billion average for the month to date, according to data
from BATS Global Markets.
(Reporting by Angela Moon; Editing by Jan Paschal)