KEEPING SCORE: The Standard & Poor’s 500 index gained 15 points, or 0.7 percent, to 2,441 as of 12:15 p.m. Eastern time. The Dow Jones industrial average rose 105 points, or 0.5 percent, to 21,514. The Nasdaq composite added 54 points, or 0.9 percent, to 6,247. The Russell 2000 index of smaller-company stocks picked up 11 points, or 0.8 percent, to 1,424.
YELLEN EFFECT: In her semiannual testimony before Congress on the economy, Yellen said the central bank expects to keep raising a key interest rate at a gradual pace and also plans to start trimming its massive bond holdings this year. Yellen cited a number of encouraging factors, including strong job gains and rising household wealth that she said should drive economic growth over the next two years. Many economists believe the Fed, which has raised rates three times since December, will increase rates one more time this year.
THE QUOTE: Yellen’s remarks on the economy and interest rate policy suggests the central bank may not need to raise interest rates as much as the market has been expecting, said Rob Haworth, senior investment strategy director at U.S. Bancorp Wealth Management.
“By holding rates lower, that means capital or investment remains somewhat cheaper for companies and the economy should be able to do well with rates perhaps not rising as much as some of us had feared,” Haworth said.
LEADING THE PACK: Real estate companies and other high-dividend paying stocks were among the big gainers, benefiting from rising bond prices, which pulled bond yields lower. Health care property owner HCP rose 67 cents, or 2.2 percent, to $31.62. Mall owner Simon Property Group climbed $2.65, or 1.7 percent, to $156.59.
TECH SURGE: Technology companies also notched solid gains. PayPal was up $2.39, or 4.4 percent, to $57.15. Western Digital rose $3.50, or 3.8 percent, to $95.25.
DEBT PLAY: NRG Energy soared 19.7 percent after the company said it plans to raise up to $4 billion through asset sales in order to lower its debt. The stock added $3.20 to $19.51.
HIGH FLYERS: Several airlines were trading higher after American Airlines Group and United Continental reported solid results for June. American Airlines gained $1.81, or 3.5 percent, to $53.42. United Continental picked up $3.08, or 4 percent, to $80. Delta Air Lines rose 98 cents, or 1.8 percent, to $55.26.
CLEANING UP: ABM Industries climbed 4 percent after the cleaning and maintenance services company said it will buy facilities services company GCA from Thomas Lee Partners and Goldman Sachs. The stock added $1.63 to $42.32.
BONDS: Bond prices rose. The yield on the 10-year Treasury note fell to 2.32 percent from 2.37 percent late Tuesday.
OIL: Benchmark U.S. crude rose 42 cents, or 0.9 percent, to $45.46 per barrel on the New York Mercantile Exchange. Brent crude, used to price international oils, gained 40 cents, or 0.8 percent, to $47.92 per barrel in London.
MARKETS OVERSEAS: Stocks turned higher in Europe, sending Germany’s DAX up 1.5 percent, while France’s CAC 40 gained 1.6 percent. Britain’s FTSE 100 rose 1.2 percent. Markets in Asia finished mostly lower. Japan’s Nikkei 225 fell 0.5 percent and South Korea’s Kospi lost 0.2 percent. Hong Kong’s Hang Seng index rose 0.6 percent.
CURRENCIES: The dollar fell to 113.21 yen from 113.84 yen late Tuesday. The euro weakened to $1.1413 from $1.1476.