US stocks rise as Yellen talks rate hike

NEW YORK (AFP) - Wall Street stocks climbed on Friday, absorbing comments from Federal Reserve chairman Janet Yellen that implied interest rates could be lifted soon.

Yellen, speaking at Harvard University, said a rate hike "probably" would be justified "in the coming months" if economic data continued to strengthen.

Stocks briefly cut their gains following the remarks, but later recovered.

The Dow Jones Industrial Average rose 0.3 per cent to 17,873.22.

The broad-based S&P 500 climbed 0.4 per cent to 2,099.06, while the tech-rich Nasdaq Composite Index jumped 0.7 per cent to 4,933.50.

The gains show the market views a rate hike as confirmation US growth is on track. But Jack Ablin, chief investment officer at BMO Private Bank, noted stocks tumbled in January after initially taking a benign view of the Fed's December rate hike.

"The market is giving permission to the Fed to raise rates," Ablin said. "We'll see what actually happens when they do."

Financial stocks advanced, with Bank of America rising 1.2 per cent and JPMorgan Chase and Goldman Sachs both up 0.6 per cent.

US-listed Chinese stocks were another strong category, with Alibaba rising 3.3 per cent, Baidu 4.1 per cent and 4.7 per cent.

Google parent Alphabet climbed 1.2 per cent after a jury ruled in a retrial that Google did not unfairly use parts of Oracle's Java programming language in its Android smartphone operating system. The retrial stemmed from a 2012 case in which Google also had prevailed.

Oracle, which sought US$9 billion in damages, said there were grounds for an appeal. Oracle rose 0.3 per cent.

FEI Company, which manufacturers high-tech microscopes, surged 14.3 per cent following an announcement that it agreed to be acquired by Thermo Fisher Scientific for about US$4.2 billion. Thermo Fisher rose 0.6 per cent.

Ulta Beauty leaped 9.1 per cent after first-quarter net income shot up 37.3 per cent to US$92 million and the cosmetics company pointed to "healthy" consumer demand for beauty products.