U.S. stocks were higher on Wednesday afternoon after three straight sessions of losses as comments by Federal Reserve Chair Janet Yellen eased investor concerns about the U.S. economy's ability to absorb a gradual rise in interest rates.
But indexes were off their highs of the session, with both energy and materials sectors in negative territory. The Dow briefly traded lower.
Technology and healthcare shares that had sold off sharply in recent sessions led sector gains. The S&P technology index .SPLRCT was up 0.9 percent while healthcare was up 1.5 percent. Shares of Microsoft (MSFT.O) were up 1.4 percent at $49.97.
Yellen acknowledged that tightening financial conditions and uncertainty about China posed risks to the U.S. economy, but told Congress she does not expect the central bank to reverse the rate hike programme it began in December.
She emphasized a steady-as-she-goes account of Fed policy, with good reason to believe the U.S. economy will continue to grow and allow the Fed to pursue its plan of gradual rate hikes.
"She really struck a tone between dovish and hawkish, and I think delivered, for the most part, what the market needed. She was dovish enough to signal that a March rate hike is probably off the table but hawkish enough to leave the impression the Fed is confident the economic recovery will persist," said Kelly Bogdanov, portfolio manager at RBC Wealth Management in San Francisco.
"That's very important for stocks because as long as we can avoid a recession, this correction will probably work itself out and we'll have the opportunity to bounce back."
U.S. stocks have struggled since the start of the year amid mounting worries over a slowdown in global and U.S. economic growth.
At 3:13 p.m., the Dow Jones industrial average was up 8.83 points, or 0.06 percent, to 16,023.21, the S&P 500 .SPX gained 13.01 points, or 0.7 percent, to 1,865.22 and the Nasdaq Composite added 53.03 points, or 1.24 percent, to 4,321.79.
Disney (DIS.N) dropped nearly 4 percent to $88.97 after reporting lower profit at its ESPN sports network. The stock hit its lowest since October 2014 and weighed on the Dow.
Advancing issues outnumbered declining ones on the NYSE by 2,030 to 1,005, for a 2.02-to-1 ratio on the upside; on the Nasdaq, 1,739 issues rose and 1,021 fell for a 1.70-to-1 ratio favouring advancers.
The S&P 500 posted 6 new 52-week highs and 14 new lows; the Nasdaq recorded 3 new highs and 158 new lows.
(Additional reporting by Abhiram Nandakumar in Bengaluru; Editing by Savio D'Souza and Nick Zieminski)
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Published Date: Feb 11, 2016 02:45 am | Updated Date: Feb 11, 2016 02:45 am