US close: Stocks end higher after Yellen speech as oil gains

US stocks ended higher on Monday as oil prices advanced and investors digested a fairly upbeat speech by Federal Reserve chair Janet Yellen.

The Dow Jones Industrial Average closed up 0.6% and the Nasdaq ended up 0.5%, while the S&P 500 rose 0.5% to its highest close this year.

At the same time, oil prices settled higher after Exxon Mobil reported a pipeline failure and spill at its Torrance refinery near Los Angeles. Supply disruptions in Nigeria also propped up prices as it helped to soothe the global output glut.

West Texas Intermediate rose 2.3% to $49.74 per barrel and Brent crude added 1.8% to $50.55.

In her speech at the World Affairs Council of Philadelphia, Yellen did not provide an exact date for the central bank’s next move on policy but said further gradual interest rate increases were likely to be appropriate.

"If incoming data are consistent with labour market conditions strengthening and inflation making progress toward our 2% objective, as I expect, further gradual increases in the federal funds rate are likely to be appropriate and most conducive to meeting and maintaining those objectives," she said.

"I see good reasons to expect that the positive forces supporting employment growth and higher inflation will continue to outweigh the negative ones. As a result, I expect the economic expansion to continue, with the labour market improving further and GDP growing moderately."

Expectations about the timing of the next Fed rate hike have been pushed back following last Friday’s dismal nonfarm payrolls report, which showed US employers added just 38,000 jobs in May versus estimates of 164,000,

However, Yellen warned in her speech that market participants should not make too much of one jobs report.

"Although this recent labour market report was, on balance, concerning, let me emphasise that one should never attach too much significance to any single monthly report," she said.

Capital Economics said: “Based on her speech today, Fed Chair Janet Yellen might still be in favour of a July rate hike, but it will require a bounce-back in June's employment figures and a vote by the UK to remain in the European Union.

“Coming in the wake of last Friday's news of a sharp slowdown in employment growth in May,Yellen's comments were surprisingly upbeat. That said, she did not repeat her recent comment that a rate hike would be appropriate in the 'coming months’. She noted that ‘the news from the labour market over the past year has been generally good’ and that there were ‘tentative signs of faster wage growth’."

Capital Economics expects the Fed to raise rates twice this year, in July/September and December. Beyond that, it expects rising wage and price inflation to prompt the Fed to change tack next year, with the fed funds rate above 2% by end-2017.

Earlier, Boston Fed President Eric Rosengren said in a speech in Finland that a rate hike was still likely, albeit not this month, despite the weak jobs report.

He said it was important to wait and see whether the payrolls report was a reflection of a broader slowing in labour markets or just an anomaly.

On the corporate front, energy-related shares put in the strongest performance amid rising oil prices, with Transocean, Chesapeake Energy and Baker Hughes all firmly in the black.

S&P 500 - Risers

Transocean Ltd. (RIG) $11.17 +14.68%

Chesapeake Energy Corp. (CHK) $4.57 +11.74%

Helmerich & Payne Inc. (HP) $64.74 +10.12%

CF Industries Holdings Inc. (CF) $31.15 +8.88%

National Oilwell Varco Inc. (NOV) $34.86 +8.63%

Diamond Offshore Drilling Inc. (DO) $25.59 +7.16%

Baker Hughes Inc. (BHI) $49.52 +7.09%

Mosaic Company (MOS) $28.36 +6.22%

Freeport-McMoRan Inc (FCX) $11.65 +4.91%

TripAdvisor Inc. (TRIP) $71.46 +4.84%

S&P 500 - Fallers

Tyson Foods Inc. (TSN) $60.87 -3.70%

AbbVie Inc (ABBV) $62.81 -3.38%

Best Buy Co. Inc. (BBY) $31.33 -3.15%

Apartment Investment & Management Co. (AIV) $39.80 -2.67%

Urban Outfitters Inc. (URBN) $28.55 -2.13%

Welltower Inc (HCN) $69.82 -2.10%

Equity Residential (EQR) $63.62 -2.08%

Monsanto Co. (MON) $108.75 -2.03%

Signet Jewelers Ltd (SIG) $86.41 -2.02%

Home Depot Inc. (HD) $129.18 -1.94%

Dow Jones I.A - Risers

Boeing Co. (BA) $131.90 +3.55%

Caterpillar Inc. (CAT) $76.42 +1.84%

Nike Inc. (NKE) $54.28 +1.55%

Exxon Mobil Corp. (XOM) $89.34 +1.10%

3M Co. (MMM) $170.10 +1.02%

JP Morgan Chase & Co. (JPM) $65.30 +1.02%

Unitedhealth Group Inc. (UNH) $138.16 +0.96%

Merck & Co. Inc. (MRK) $57.18 +0.95%

United Technologies Corp. (UTX) $101.33 +0.90%

Johnson & Johnson (JNJ) $115.74 +0.85%

Dow Jones I.A - Fallers

Home Depot Inc. (HD) $129.18 -1.94%

Verizon Communications Inc. (VZ) $50.71 -0.41%

Travelers Company Inc. (TRV) $114.29 -0.29%

International Business Machines Corp. (IBM) $152.69 -0.13%

Cisco Systems Inc. (CSCO) $29.10 -0.10%

E.I. du Pont de Nemours and Co. (DD) $68.75 -0.04%

Nasdaq 100 - Risers

TripAdvisor Inc. (TRIP) $71.46 +4.84%

Mylan Inc. (MYL) $46.52 +4.49%

Priceline Group Inc (PCLN) $1,349.10 +3.64%

Whole Foods Market Inc. (WFM) $34.91 +2.47%

Vertex Pharmaceuticals Inc. (VRTX) $96.09 +2.27%

Endo International Plc (ENDP) $17.96 +2.10%

Bed Bath & Beyond Inc. (BBBY) $45.33 +1.98%

Ctrip.Com International Ltd. Ads (CTRP) $44.70 +1.96%

Akamai Technologies Inc. (AKAM) $54.53 +1.83%

Starbucks Corp. (SBUX) $55.59 +1.79%

Nasdaq 100 - Fallers

Nxp Semiconductors Nv (NXPI) $90.26 -1.97%

Analog Devices Inc. (ADI) $57.09 -1.76%

Charter Communications Inc. (CHTR) $221.68 -1.45%

Ross Stores Inc. (ROST) $52.34 -1.41%

T-Mobile Us, Inc. (TMUS) $43.07 -1.28%

Skyworks Solutions Inc. (SWKS) $66.11 -1.24%

Xilinx Inc. (XLNX) $46.87 -1.14%

Lam Research Corp. (LRCX) $82.31 -0.95%

Applied Materials Inc. (AMAT) $24.17 -0.90%

Alphabet Inc. Class C (GOOG) $716.55 -0.80%