NEW YORK, May 26 — US stocks fell, amid comments by Federal Reserve officials that bolstered bets on an interest-rate increase this year and durable goods data added to evidence the economy is emerging from a slowdown.

The Standard & Poor’s 500 Index declined 0.3 per cent to 2,120.20 at 9.32am in New York, after its third straight weekly advance.

“The market is kind of striking this in-between, wanting better economic data but then the flip side meaning the Fed is that much sooner to raising rates,” said Walter Todd, who oversees about US$1 billion as chief investment officer for Greenwood, South Carolina-based Greenwood Capital. “I’m fine with that, with seeing better economic data and dealing with the implications.”

A better-than-forecast increase in capital goods orders comes after Federal Reserve Chair Janet Yellen indicated the central bank will raise borrowing costs this year if the economy improves as she expects. Fed Bank of Cleveland President Loretta Mester echoed her comments yesterday, saying the US economy is close to the point where it can support higher rates.

Fed Vice Chairman Stanley Fischer said central bankers are weighing the risk of raising them prematurely against the danger of having to play catch-up if they wait too long.

September increase

Economists expect the Fed to increase rates in September, according to a Bloomberg survey. Investors today will scrutinise other reports for additional clues on the strength of the economy. April new-home sales increased, economists forecast, while a preliminary figure may show an index tracking services growth declined in May and consumer confidence slipped.

A report showed home prices in 20 US cities rose at a faster pace than projected in the year through March, reflecting a limited number of available properties on the market.

While US stocks had their slowest week of trading since New Year’s and the tightest range for equities in six months, the S&P 500 reached a fresh record on May 21. The index climbed 0.2 per cent last week for its third consecutive weekly advance, the longest such stretch since February. Equity markets were closed yesterday for the Memorial Day holiday. — Bloomberg