US open: Stocks rise as investors eye Yellen speech
US equity markets nudged up on Monday, as investors eyed Federal Reserve chair Janet Yellen’s speech less than a week after the central bank hiked interest rates by 25 basis points.
Investors will also look at whether the Dow will be able to reach the 20,000 mark after falling short twice last week.
The Dow Jones Industrial Average was up 0.24% to 19,891.85, the S&P 500 rose 0.25% to 2,263.66, and the Nasdaq increased 0.41% to 5,459.36 at 1504 GMT.
Yellen is to speak at the University of Baltimore at 1830 GMT on the jobs market, her last speech this year as Christmas draws closer. Last Wednesday the Fed raised its benchmark interest rate by 25 basis points to a target range between 0.5% and 0.75% and indicated that there will be three further hikes next year.
Michael Hewson, chief market analyst at CMC Markets, said: “The dollar has maintained its resilience after Friday’s weakness as a number of Fed officials continue to weigh in that several rate rises could well be on the agenda in 2017."
“This was reinforced over the weekend by Richmond Fed president Jeffery Lacker in an almost eerie echoing of events this time last year. Last year a number of Fed officials including Lacker also sounded off about the prospects of much tighter policy only to spend most of the year procrastinating before finally delivering just the one rise in rates.
“While Lacker’s views are important they aren’t generally representative of the FOMC and he doesn’t have a vote until 2018 in any case. With three new Fed presidents due to take up their voting rights in 2017 the dovish or hawkish bias of Kashkari of the Minneapolis Fed, Kaplan of the Dallas Fed and Harker of the Philadelphia Fed still remain an unknown quantity.”
Meanwhile, investors mulled the state of Sino-US relations, as the two world powers talk after the Chinese navy took a US underwater drone from South China Sea on Thursday.
The dollar was down 0.69% to 117.12 against the yen, but rose 0.23% to 0.9590 versus the euro, and was higher by 0.91% to 0.8081 versus sterling.
In commodity markets, oil prices retreated as Brent crude fell 0.14% at $55.14 a barrel and West Texas Intermediate was down 0.13% to $51.83 at 1423 GMT.
Gold on Comex was gained 0.35% to 1,141.40 per troy ounce.
On the data front, Markit’s flash services purchasing managers’ index unexpectedly fell in December to 53.4 from 54.6 the previous month, a reading above 50 indicates that the US economy expanded. Economists anticipated an increase to 55.2.
In corporate news, shares in Jakks Pacific tanked 25.89% after the toymaker cut its outlook late on Friday.
Whereas shares in Lennar Corp surged 3.41% after the housebuilder reported a 14.6% jump in fourth-quarter revenue.
Walt Disney advanced 1.88% after the spin-off from the Star Wars saga, Rogue One, earned $155m at the box office in opening weekend in the US and Canada.