[NEW YORK] Wall Street rose on Monday morning, helped by financial stocks that gained a day after Federal Reserve Chair Janet Yellen said the case for an interest rate hike had strengthened.
Ms Yellen, addressing a gathering of global central bankers on Friday, said the central bank was close to meeting its goals of maximum employment and stable prices, while describing consumer spending as "solid".
Ms Yellen gave little indication of when the Fed would move but Vice Chairman Stanley Fischer suggested that a move as soon as next month could be possible. "It's a delicate yet deliberate delivery of reality," said Andre Bakhos, managing director at Janlyn Capital. "Rates are going to move higher, based on the economic evidence, but the "when" of the move is up in the air."
Financial stocks, which stand to gain the most in a higher interest rate environment, rose as traders raised bets on a hike in the coming months.
The S&P 500 financial index rose 0.6 per cent, with Wells Fargo and JPMorgan rising about 0.8 per cent.
The index was trading at its highest level since Dec 30, shortly after the Fed raised rates for the first time in nearly a decade.
The chances of a rate hike in September jumped to 30 per cent from 21 per cent, while the measure rose to 45.1 per cent from 41.4 per cent for December, according to CME Group's FedWatch tool.
A report from the US Commerce Department showed consumer spending, which accounts for more than two-thirds of US economic activity, rose for the fourth straight month in July.
Still, in the 12 months through July the core personal consumption expenditure, the Fed's preferred inflation measure, increased 1.6 per cent, below its 2 per cent target.
At 9:39 am ET (1339 GMT), the Dow Jones Industrial Average was up 74.82 points, or 0.41 per cent, at 18,470.22.
The S&P 500 was up 8.05 points, or 0.37 per cent, at 2,177.09.
The Nasdaq Composite was up 11.51 points, or 0.22 per cent, at 5,230.42.
The dollar index rose 0.25 per cent, trading at more than a two-week high, while oil prices slipped more than 1 per cent.
Microsoft rose 0.8 per cent and gave the biggest boost to the S&P 500 and the Nasdaq after UBS raised its price target.
Mylan shares rose 1 per cent after the drugmaker announced a generic version of its allergy treatment EpiPen.
Herbalife rose 4 per cent after Carl Icahn bought 2.3 million shares in the nutritional supplements maker after denying reports of attempts to sell his stake.
Advancing issues outnumbered decliners on the NYSE by 1,763 to 859. On the Nasdaq, 1,327 issues rose and 903 fell.
The S&P 500 index showed eight new 52-week highs and one new low, while the Nasdaq recorded 44 new highs and three new lows.