UKX FTSE 100 Index

By Carla Mozee, MarketWatch

Investors wait to hear from Fed chief Yellen

U.K. stocks sought firm direction Friday, as investors waited for a highly anticipated speech from U.S. Federal Reserve Chairwoman Janet Yellen.

The FTSE 100 was flat at 6,816.73, but it has been swinging between small gains and losses during the day. Utilities, health care and consumer goods were among the declining sectors, but miners were higher after being under pressure this week. The London benchmark was on track to fall 0.6% for the week, which would be a second straight weekly loss.

The index on Thursday lost 0.3% (http://www.marketwatch.com/story/ftse-100-struggles-as-miners-drug-makers-pull-lower-2016-08-25), weighed by those losses for miners and for drug makers.

But advancers on Friday included BAE Systems PLC (BA.LN) , perched near the top of the FTSE 100. Shares rose 2.1% as the defense company's rating was upgraded to buy from hold at Berenberg.

"We anticipate a material order book uplift, an improving cash profile in 2017 (with potential upside to guidance), and a secure progressive dividend across our forecast," wrote Berenberg analyst Charlotte Keyworth in a research note.

Economic docket: The second reading of U.K. gross domestic product in the second quarter was released, and the Office for National Statistics confirmed the preliminary print of 0.6%, meeting market expectations.

The pound held steady around $1.3217 after the ONS update, but began stepping lower before Yellen's speech at 3 p.m. London time, or 10 a.m. Eastern Time.

Investors will watch for hints on the future of U.S. interest rates from Yellen, who will address attendees at the central bank's summer summit in Jackson Hole, Wyo.

"Chair Yellen faces a daunting task today of delivering a differential confidence message on U.S. growth and inflation fundamentals, but without destabilizing financial conditions in a highly rate-sensitive international market environment," said Lena Komileva, chief economist at G+ Economics, in a note.

"For risk markets more broadly, the Fed has limited room to oppose an expansionary global monetary consensus, given the U.S. dollar's rate sensitivity in an international monetary environment of negative rates and central bank QE," she said.

Sterling was buying $1.3199, compared with $1.3175 late Thursday. The yield on the U.K.'s 10-year gilt was up less than 1 basis point at 0.56%, according to TradeWeb.

The Bank of England early this month expanded its QE program and launched other aggressive easing moves aimed at cushioning the British economy in the wake off the Brexit vote.

Read:The 4 scenarios investors face ahead of Yellen's Jackson Hole speech (http://www.marketwatch.com/story/the-4-scenarios-investors-face-ahead-of-yellens-jackson-hole-speech-2016-08-25)

Movers: Shares of Glencore PLC (GLEN.LN) pushed up 2.9% after two sessions of heavy declines, after the miner posted a half-year loss of $369 million (http://www.marketwatch.com/story/glencore-steps-up-debt-cuts-as-it-swings-to-loss-2016-08-24).

Other mining stocks rose as well, with Rio Tinto PLC (RIO) (RIO) (RIO) up 2.1% and Antofagasta PLC (ANTO.LN) higher by 0.9%.

But drug makers remained under pressure in the wake of backlash about drug pricing in the U.S. The furor was spurred by a substantial price hike for Mylan NV's (MYL) EpiPen, an emergency allergy treatment.

Read:How Hillary Clinton crushed another rally in biotech (http://www.marketwatch.com/story/how-hillary-clinton-crushed-another-rally-in-biotech-2016-08-24)

In London, Shire PLC (SHPG) (SHPG) fell 0.7%, AstraZeneca PLC (AZN.LN) (AZN.LN) was down 1.2%, and GlaxoSmithKline PLC (GSK.LN)(GSK.LN) lost 0.5%.

Hikma Pharmaceuticals PLC (HIK.LN) , however, picked up 0.6%.

Brewer SABMiller PLC (SAB.JO) was up 0.1% after Belgium's Anheuser-Busch InBev NV (ABI.BT) warned its merger with SAB could lead to thousands of job losses (http://www.marketwatch.com/story/ab-inbev-warns-3-to-be-laid-off-in-merger-2016-08-26) in coming years, according to documents related to the transaction.

On the midcap FTSE 250, Amec Foster Wheeler PLC (AMFW.LN) shares jumped 7.8% following a ratings upgrade at Morgan Stanley of the energy engineering company to overweight from equalweight.

Meanwhile, Ladbrokes PLC (LAD.LN) climbed 3.1% after the betting company's rating was lifted to buy from hold at Berenberg.

The FTSE 250 was up 0.2% at 17,918.14.

(END) Dow Jones Newswires

August 26, 2016 07:02 ET (11:02 GMT)

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