Wall Street was higher on Wednesday, led by financial stocks, after Federal Reserve Chair Janet Yellen said conditions in the United States would allow the Fed to pursue “gradual” adjustments to monetary policy.
However, tightening financial conditions driven by falling stock prices, uncertainty over China and a global reassessment of credit risk could throw the U.S. economy off track from an otherwise solid course, Yellen said in a prepared testimony to Congress.
Uncertainty over interest rates had hit bank stocks in recent days. Banking stocks were up, led by Citigroup (C.N). Goldman Sachs (GS.N), up 1.3 percent, gave the biggest boost to the Dow. The S&P financial sector .SPSY was up nearly 1 percent.
Yellen is scheduled for an appearance before the House Committee on Financial Services at 10:00 a.m. ET.
The Fed raised rates in December. But, since then, fears of a China-led global economic slowdown, along with oil’s steep slide, have dampened the market’s expectations for a hike in coming months.
“Unfortunately, we haven’t been able to divorce ourselves from the themes that were prevalent last year,” said Eric Wiegand, senior portfolio manager at the Private Client Reserve at U.S. Bank in New York.
Wiegand said the Fed and monetary policy remain at the forefront of investors’ concern.
At 9:36 a.m. ET, the Dow Jones industrial average .DJI was up 56.77 points, or 0.35 percent, at 16,071.15.
The S&P 500 .SPX was up 10.97 points, or 0.59 percent, at 1,863.18 and the Nasdaq Composite index .IXIC was up 37.33 points, or 0.87 percent, at 4,306.10.
Six of the 10 major sectors were higher, led by the 1.11 percent rise in the technology sector .SPLRCT. Microsoft’s (MSFT.O) 1.3 percent rise was the biggest positive influence on the S&P 500 and the Nasdaq.
Walt Disney (DIS.N) was down 4.6 percent at $88.11 after a fall in profit at its ESPN sports network overshadowed the success of “Star Wars”. The stock, which also hit a new 52-week low, was the biggest drag on the Dow.
Advancing issues outnumbered decliners on the NYSE by 1,952 to 706. On the Nasdaq, 1,639 issues rose and 531 fell.
REUTERS
