Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., August 25, 2016. REUTERS/Brendan McDermid
NEW YORK: Wall Street was higher on Friday morning, boosted by financial stocks, minutes before a speech by Federal Reserve chair Janet Yellen that is expected to provide a clearer picture on when interest rates will be raised next.
Yellen speaks before a gathering of global central bankers in Jackson Hole, Wyoming, at 10:00am ET (1400 GMT).
Her language will be carefully scrutinised, especially after an increasing number Fed policymakers have pushed the case for raising rates by pointing at improving employment and inflation rates. At least three more Fed members on Friday added to the hawkish tone.
All 10 major S&P 500 sectors were higher. Financials, which stand to gain the most if rates are raised, increased 0.36%.
“I think today it’s going to be more about taking the temperature than a will-they-won’t-they scenario,” said Paul Nolte, portfolio manager at Kingsview Asset Management.
At 9:35am ET the Dow Jones industrial average was up 54.05 points, or 0.29%, at 18,502.46.
The S&P 500 was up 6.56 points, or 0.3%, at 2,179.03 and the Nasdaq Composite was up 13.52 points, or 0.26%, at 5,225.72.
The markets have been on tenterhooks all of this week in the run-up to Yellen’s speech. Wall Street has dropped about 0.5% from Monday through Thursday.
The dollar index edged lower as traders refused to completely buy into the recent rhetoric on rates, while prices of gold a safe haven, rose after five days of losses.
Analysts have said it was more plausible that rates would be raised in December than next month, given that inflation rates remain below the Fed’s 2.0% target and the upcoming US presidential elections.
Traders have priced in a 21% chance of a September rate hike, with the odds rising to 41.4% for a move in December, according to CME Group’s FedWatch tool.
A report on Friday showed the US economy grew at a slower pace than previously estimated for the second quarter. However, consumer spending, which makes up more than two-thirds of economic activity, was revised up to show it increased at the fastest rate since the fourth quarter of 2014.
Shares of Herbalife fell 6% to US$58.25 after a report said Carl Icahn, the nutritional supplement maker’s top shareholder, was looking to sell his stake.
GameStop dropped 7.7% after quarterly revenue at the world’s largest retailer of video games missed analysts’ estimates.
Advancing issues outnumbered decliners on the NYSE by 1,754 to 735. On the Nasdaq, 1,242 issues rose and 830 fell.
The S&P 500 index showed 10 new 52-week highs and no new lows, while the Nasdaq recorded 34 new highs and four new lows. - Reuters
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