US open: Stocks rise on surge in oil prices, Yellen speech

US stocks rose on Tuesday as oil prices surged and a speech by Federal Reserve chair Janet Yellen suggested an interest rate hike in June was off the table.

At 1526 BST the Dow Jones Industrial Average climbed 0.35%, the S&P 500 increased 0.27% and the Nasdaq grew 0.27%.

Oil prices continued to rally on supply disruptions in Nigeria and forecasts for falling US crude inventories.

West Texas Intermediate crude was up 0.85% to $50.12 per barrel and Brent was up 1.09% to $51.11 per barrel at 1540 BST.

The Bonny Light crude output in Nigeria has dropped an estimated 170,000 barrels per day (bpd) following attacks on pipeline infrastructure, Reuters reported citing a source.

A report from the American Petroleum Institute at 2130 BST is expected to show US crude inventories fell 3.5 million barrels last week, helping to soothe concerns about the global supply glut.

A weaker dollar also supported the rise in crude prices - as it makes it cheaper for foreign buyers, increasing demand. The dollar rose 0.09% against the euro but fell 0.68% against the pound and dropped 0.20% versus the yen.

Meanwhile, Yellen said the US economy was making progress but kept quiet about the timing of another interest rate increase.

“I continue to think that the federal funds rate will probably need to rise gradually over time to ensure price stability and maximum sustainable employment in the longer run,” Yellen said Monday during a speech in Philadelphia.

Her failure to mention the specific timing on interest rates hikes was seen by economists to signal that a rise was unlikely at the policy meeting next week, particularly after a much worse-than-expected US non-farm payrolls report on Friday.

“After last Friday’s employment report and yesterday’s speech by Yellen we have changed our call for the Fed’s first rate hike this year to September,” said Rabobank.

“The slowdown in the services sector, apparent not only in the employment report, but in the ISM Non-Manufacturing Survey as well, and Yellen’s very cautious tone make a delay to September more likely than July. Our call for two hikes this year remains unchanged, and we still expect the second in December.”

Among corporate stocks, Valeant Pharmaceuticals slumped after saying it swung to a first quarter net loss of $1.08 and slash its estimate for 2016 earnings.

Shares in Ralph Lauren plunged after the company revealed a restructuring plan in an effort to lift profitability.

DryShips tumbled after the ocean transportation company disclosed in a filing that it defaulted on three bank loans.

HD Supply Holdings slid as it reported a first-quarter net loss of 7 cents per share.

FedEx gained after saying it has raised its quarterly dividend 60% to 40 cents a share.

Verizon Communications advanced as it said it would submit a second-round bid of around $3 billion for Yahoo’s core internet business. Yahoo’s shares fell.