“Most FOMC participants, including myself, now anticipate that achieving these conditions will likely entail an initial increase in the federal funds rate later this year, followed by a gradual pace of tightening thereafter“, Yellen said. The late sell-off on Friday pushed stocks to their third losing week in the last four. “Although the U.S.is continuing to improve, outside the USA, it’s just scary”.
At 9:36 a.m. ET (1336 GMT) the Dow Jones industrial average was up 171.14 points, or 1.06 percent, at 16,372.46.
Pier 1 Imports slumped 17.4 percent to an nearly 5-year low of $7.21 after the home decor and furniture importer’s results missed expectations.
The currency pair wavered between a range of 1.1117 and 1.1296, before settling at 1.1195, down 0.0037 or 0.33% on the session.
Sept 25 (Reuters) – US stocks opened higher on Friday, a day after Federal Reserve Chair Janet Yellen said she expects interest rates to be raised this year, easing concerns about slowing global growth.
On the economic front, updated government data showed that the US Gross Domestic Product expanded at a revised rate of 3.9% in the second quarter. The strength came from gains in consumer spending, business investment and residential construction.
Banks and other financial companies got a boost after Federal Reserve Chair Janet Yellen said that the central bank was still likely to raise interest rates this year.
The FPC also said United Kingdom house price inflation looked set to rise further, and it continues to monitor buy-to-let mortgages although it said there was no immediate case for action in the market.
The Nasdaq dropped 1% while the Biotech index on the same plunged by 5.1% and reached its low from August when it first entered a bear market territory.
“The financials are a wonderful place to be over the next several quarters if a rate rises materializes”, said Jim Russell, a portfolio manager at Bahl & Gaynor Investment Counsel.
Friday’s gains were helping the main indexes erase steep losses from earlier in the week, and the benchmarks are on track to finish the week roughly where they started. Nike jumped after posting strong earnings.
Volkswagen shares fell again. The company is expected to announce the appointment of a new CEO on Friday.
But currency traders do not expect this trend to persist long term, given the fact that once the United States has risen interest rates the UK will quickly fall into line and hike too. The yield on the benchmark 10-year Treasury note rose to 2.18 percent from 2.13 percent late Thursday.
The euro rose to $1.1194 while the dollar edged up to 120.60 yen.
In other markets, oil prices gained Friday as data signaled that US crude output is contracting.
Euro zone inflation and U.S.jobs data will offer clues to the health of major developed economies in the coming week while the malaise gripping emerging markets is expected to prompt India to cut interest rates.
The West Texas Intermediate for November delivery moved up 79 cents to settle at 45.7 dollars a barrel on the New York Mercantile Exchange, while Brent crude for November delivery increased 43 cents to close at 48.6 dollars a barrel on the London ICE Future Exchange.