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NEW YORK, May 6 (Xinhua) -- U.S. stocks retreated further on Wednesday following a sharp decline in the previous session, as U. S. Federal Reserve Chair Janet Yellen warned that the equity market valuations appeared "quite high."
The Dow Jones Industrial Average fell 86.22 points, or 0.48 percent, to 17,841.98. The S&P 500 decreased 9.31 points, or 0.45 percent, to 2,080.15. The Nasdaq Composite Index lost 19.68 points, or 0.40 percent, to 4,919.64.
"My assessment at this point would be that risks to financial stability are moderated, not elevated at this point," Yellen said at the "Finance and Society" conference held at the International Monetary Fund Wednesday.
But she stressed low interest rates can certainly create risks for financial stability, saying there are potential dangers, such as high equity market valuations, compressed spreads on high-yield debt, and deterioration in underwriting standards for leveraged loans.
Another potential risk that Yellen pointed out was low long- term interest rates, which could move up rapidly after the Fed raised rates.
Adding negative sentiment to the market, U.S. private jobs data came out much weaker than expected.
Private sector employment increased by 169,000 jobs in April compared with the previous month, well below market expectations of 200,000, according to the April ADP National Employment Report on Wednesday.
"The oil states are experiencing a significant growth slowdown, just as happened the last time oil prices fell so far so fast. Add a much stronger dollar, reminiscent of 1986, and manufacturing is being pinched along with mining. The mining retrenchment should pretty much run its course by the end of the first half. Until then, both economic and job growth are likely to be slower than the Fed would like," said Chris Low, chief economist at FTN Financial, in a note.
Oil prices gained Wednesday as official data showed a decline in the U.S. inventories of last week, another potential sign of a further easing of the global oversupply in crude.
Light, sweet crude for June delivery moved up 53 cents to settle at 60.93 U.S. dollars a barrel on the New York Mercantile Exchange. In London, Brent North Sea crude for June delivery, the global benchmark, moved up 25 cents to close at 67.77 dollars a barrel.
In corporate news, LendingClub Corp spiked 4.15 percent to 18. 31 dollars apiece Wednesday after reporting better-than-expected quarterly results.
The online lending company announced its operating revenue in the first quarter of 2015 was 81.0 million U. S. dollars, an increase of 109 percent year-over-year.
The CBOE Volatility Index, often referred to as Wall Street's fear gauge, increased 5.87 percent to end at 15.15 on Wednesday.
In other markets, the U.S. dollar eased against other currencies on worse-than-expected job data of the country.
In late New York trading, the euro moved up to 1.1356 dollars from 1.1195 dollars in the previous session. The dollar bought 119. 35 Japanese yen, lower than 119.87 yen of the previous session.
Gold futures on the COMEX division of the New York Mercantile Exchange drifted lower after some key Federal Reserve officials downplayed concerns about a slowdown in the U.S. economy.
The most active gold contract for June delivery lost 2.9 dollars, or 0.24 percent, at 1,190.30 dollars per ounce.
