NEW YORK (AP) — U.S. stocks are rising in afternoon trading Tuesday as Federal Reserve Chair Janet Yellen said the central bank still expects interest rates in the U.S. to rise gradually. Big names including Apple and Microsoft are leading tech stocks higher, while energy companies are falling along with the price of oil.
KEEPING SCORE: The Dow Jones industrial average rose 52 points, or 0.3 percent, to 17,587 as of 1:47 p.m. Eastern time. The Standard & Poor’s 500 index gained nine points, or 0.5 percent, to 2,046. The Nasdaq composite index climbed 53 points, or 1.1 percent, to 4,819.
FED FOCUS: In remarks to the Economic Club of New York, Fed Chair Yellen said the Fed expects to move slowly because the U.S. economy and financial conditions have weakened over the last few months, and global pressures could harm the U.S. economy. Those concerns include a broad economic slump, lower oil prices, and the shaky stock market.
Higher interest rates slow down economic growth because they make lending and borrowing more expensive, and investors feared the Fed would hurt the economy by raising interest rates too much. But earlier this month the Fed said it would go slower in raising rates, and Yellen emphasized that course on Tuesday.
TURNAROUND: Stocks were trading slightly lower before Yellen’s remark, but they moved higher after the text of her remarks was released. The price of gold climbed while bond yields fell and the dollar weakened. The yield on the 10-year U.S. Treasury note slid to 1.82 percent from 1.89 percent. The euro rose to $1.1275 from $1.1200. The dollar slipped to 112.81 yen from 113.28 yen. Gold rose $15.70, or 1.3 percent, to $1,235.80 an ounce.
TECH STOCKS: Apple climbed $2.05, or 1.9 percent, to $107.24 after the FBI dropped its legal efforts to force Apple to break into the iPhone used by Syed Farook, who along with his wife killed 14 people in San Bernadino, California, in December. The FBI said it was able to hack into the phone, and asked a court to vacate an order forcing Apple to help. Apple had been fighting the government’s efforts and said it will continue trying to make its products more secure.
Elsewhere, Microsoft added $1.06, or 2 percent, to $54.60. Information technology company SAIC advanced $4.46, or 9.6 percent, to $51.01 after its fourth-quarter profit was far larger than analysts expected.
ENERGY: Benchmark U.S. crude dropped $1.22, or 3.1 percent, to $38.17 a barrel in New York. Brent crude, used to price international oils, lost $1.09, or 2.7 percent, to $39.78 a barrel in London. The price of wholesale gasoline and heating oil also slipped.
Drilling company Transocean lost 55 cents, or 5.9 percent, to $8.76. Hess fell $1.81, or 3.6 percent, to $49.03 and Chevron gave up 40 cents to $94.28.
MEDIVATION INQUIRY: Drugmaker Medivation fell after a group of legislators urged a federal agency to take steps that could cut the price of Medivation’s prostate cancer treatment Xtandi. Xtandi is Medivation’s only approved drug, and sales topped $1 billion last year. The stock shed $3.16, or 7.7 percent, to $38.09.
HOMEBUILDERS RALLY: Homebuilder Lennar is rising after it reported strong quarterly results, selling more homes at higher prices. Its stock gained 81 cents, or 1.7 percent, to $47.51. Competitor D.R. Horton rose 70 cents, or 2.3 percent, to $30.52 and PulteGroup added 28 cents, or 1.5 percent, to $18.40.
BANKS BONKED: Banks are able to charge more money on lending when interest rates are higher, and they’ve been hurt this year as the Fed has emphasized that interest rates won’t go up very much.
The weakening price of oil also hurt bank stocks. They have come under pressure because investors are worried that their loans to energy companies won’t be repaid.
Bank of America fell 33 cents, or 2.4 percent, to $13.29 and Fifth Third Bancorp lost 45 cents, or 2.7 percent, to $16.51.
FEELING GOOD: Consumers said they are feeling more confident, partly because the stock market has rebounded over the last month and a half. The Conference Board said its consumer confidence index rose. Their view of current economic conditions grew dimmer, but consumers reported feeling a bit better about the future.
CONN NOT: Retailer Conn’s skidded $3.40, or 21.7 percent, to $12.25 after its quarterly profit came up short of estimates and its 2016 forecasts disappointed investors.
OVERSEAS: France’s CAC 40 added 0.9 percent and Germany’s DAX picked up 0.4 percent. The FTSE 100 index of leading British shares was little changed. Japan’s benchmark Nikkei 225 lost 0.2 percent and South Korea’s Kospi added 0.6 percent. Hong Kong’s Hang Seng gained 0.1 percent.
AP Markets Writer Marley Jay can be reached at http://twitter.com/MarleyJayAP. His work can be found at http://bigstory.ap.org/journalist/marley-jay