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Stocks finish mixed; Yellen's comments hurt biotech and social media shares

Dean Arrindell
Hot Stock Minute

Stocks were mixed at today's close although all major indexes were little changed from the previous session. Tthe Dow (^DJI) ended 5 points higher at 17,061, while the Nasdaq (^IXIC) fell 24 points to 4,416 and the S&P 500 (^GSPC) lost 4 points to end at 1,973.

Investors focused on testimony from Federal Reserve Chair Janet Yellen before the Senate Banking Committee. She indicated that the Fed will continue to keep short-term interest rates near zero for some time, but her comments in the semi-annual report on monetary policy affected two stock sectors. Yellen said valuations in biotech and social media stocks were stretched. Shares of Biogen (BIIB), Amgen (AMGN) and Exelixis (EXEL) all closed lower as did shares of Yelp (YELP) Facebook (FB) and Twitter (TWTR).  Yellen will testify before the House Financial Services Committee tomorrow.

Retail sales grew in June but were up just 0.2%, well below the 0.6% expected. Sectors like apparel, department stores and bars and restaurants saw growth, but auto sales fell 0.3%, dragging down sales overall.

Reynolds American (RAI) agreed to acquire its rival Lorillard (LO) for $27.4 billion, creating the second largest tobacco company in the U.S. The two companies will sell their Kool, Salem, Winston, Maverick and blu e-cigarette brands to British-based Imperial Tobacco Group (ITYBF) for $7.1 billion. British American Tobacco (BTI) will maintain its 42% stake in Reynolds. Reynolds American fell $4.34 to end at $58.84 while Lorillard finished $7.05 lower at $60.17 -- a 10.5% loss.

Analysts covering a couple of stocks gave them a boost. Plug Power (PLUG) gained 16% to close at $4.85 , after FBR Capital Markets initiated coverage of the fuel-cell power company with an "outperform" rating and a target price of $8. GoPro (GPRO) soared 13% to end at $41.63 after JMP Securities initiated coverage of the company that went public last month. The action-camera company was given a "outperform" rating and a target price of $60.

Meanwhile, Michael Kors (KORS) fell more than 7% to close at $79.44 after analysts at Citigroup and Sterne Agee voiced concern about the clothing company’s profitability.

Intel (INTC) and Yahoo (YHOO) both reported results after the close. Intel shares, which rose 22 cents to end at $31.71 added $1.35 n the first hour of afterhours trading. Yahoo shares lost 9 cents during the session to end at $35.61 but recovered about half that loss during the first hour of afterhours trading .

Tomorrow, we’ll hear from Bank of America (BAC), eBay (EBAY) and Yum! Brands (YUM) about their latest earnings, and the producer price index for June will be released at 8:30 a.m. Eastern.