US stocks rise, led by banks and phone companies


NEW YORK (AP) — U.S. stocks are making small gains Friday in a quiet end to a strong week on the market. Banks are rising after Fed Chair Janet Yellen confirmed that the central bank intends to keep raising interest rates provided the economy keeps improving. Verizon reportedly agreed in principle to a new contract with striking employees, and telecom stocks edged higher.

KEEPING SCORE: The Dow Jones industrial average rose 22 points, or 0.1 percent, to 17,850 as of 3:20 p.m. Eastern time. The Standard & Poor’s 500 index added 6 points, or 0.3 percent, to 2,095. The Nasdaq composite index picked up 23 points, or 0.5 percent, to 4,924. Trading was light ahead of the Memorial Day holiday on Monday. But after big gains earlier in the week, stocks are on pace for their biggest weekly advance since the week that started on Feb. 29.

YELLEN: Federal Reserve Chair Janet Yellen says it will be “appropriate” to raise interest rates in the next few months if the economy continues to improve. Speaking at Harvard University, Yellen emphasized again that the Fed will move slowly and carefully in taking interest rates higher.

Higher interest rates would mean bigger profits for banks, as they can charge more money for lending. Bank stocks have struggled this year because the Fed has pushed back plans to raise rates. Bank of America rose 13 cents to $14.83 and Citigroup picked up 36 cents to $46.47.

Bond prices dipped and the yield on the 10-year U.S. Treasury note rose to 1.85 percent from 1.83 percent. The yield on the Treasury note is closely tied to interest rates.

REVISED: The Commerce Department said the U.S. economy was a bit stronger in the first quarter than it initially believed. The agency said the national gross domestic product grew 0.8 percent in the first three months of the year, above its original estimate of 0.5 percent. Experts think the economy will grow about 2 percent in the current quarter.

THE QUOTE: “The Fed’s kind of walking a tight rope here,” said Jon Adams, senior investment strategist for BMO Global Asset Management. He noted that in recent months, stocks have slumped when Fed officials talked about their plans to raise interest rates. But Adams said that might be changing.

“Both inflation and growth are on an upward trend,” he said.

TAKE THE CALL: Labor Secretary Thomas Perez said Verizon and its unions agreed in principle to a new four-year contract. About 39,000 landline and cable employees in the Eastern U.S. went on strike in April. They had been working without a contract since August. Verizon gained 43 cents to $50.59.

A WIN FOR GOOGLE: Alphabet, the parent of Google, rose after a federal jury said the company did not need permission to use tools made by Oracle when it built its Android software. Oracle said Google stole its intellectual property and sought $9 billion in damages, and it plans to appeal the ruling. Alphabet stock added $9.56, or 1.3 percent, to $746.49 and Oracle picked up 5 cents to $40.

ENERGY: Benchmark U.S. crude oil lost 15 cents to $49.33 a barrel in New York. Brent crude, which is used to price international oils, gave up 27 cents to $49.32 a barrel in London. Energy companies traded lower and Anadarko Petroleum lost 97 cents, or 1.9 percent, to $51.31.

HEAVY METAL: Machinery maker Terex dropped after Chinese heavy equipment maker Zoomlion abandoned its effort to buy the company. It said the sides had failed to reach a deal after months of talks. Zoomlion offered to buy Terex at the start of the year, after Terex accepted an offer from Finland’s Konecranes. Terex backed out of that agreement and said it will sell its crane business to Konecranes instead. Terex stock lost $3.82, or 15.7 percent, to $20.51.

A CLOSE LOOK: Scientific equipment maker Thermo Fisher said it will buy electron microscope maker FEI for $107.50 per share in cash, or about $4.2 billion. The deal comes about two months after Thermo Fisher paid $1.3 billion to buy Affymetrix, a company that makes equipment to analyze genetic codes. FEI stock climbed $13.17, or 13.9 percent, to $107.75 and Thermo Fisher added 61 cents to $151.81.

PRETTY, GOOD: Ulta Salon, Cosmetics and Fragrance posted strong first-quarter results and raised its estimates for the year. Its stock advanced $18.21, or 8.5 percent, to $213.90.

METALS: The price of gold fell $6.60 to $1,213.80, and it’s slipped about 5 percent over the last two weeks. Silver fell 7 cents to $16.27 an ounce. Copper rose 1 cent to $2.11 a pound.

OTHER ENERGY TRADING: Wholesale gasoline rose 1 cent to $1.63 a gallon. Heating oil fell 1 cent to $1.49 a gallon. Natural gas rose 2 cents to $2.17 per 1,000 cubic feet.

OVERSEAS: Germany’s DAX and the FTSE 100 in Britain both rose 0.1 percent, and France’s CAC 40 gained a bit less than that. Japan’s benchmark Nikkei 225 index added 0.4 percent and South Korea’s Kospi gained 0.6 percent. Hong Kong’s Hang Seng climbed 0.9 percent.

CURRENCIES: The dollar rose to 110.38 yen from 109.72 yen. The euro dipped to $1.1115 from $1.1191.

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AP Markets Writer Marley Jay can be reached at http://twitter.com/MarleyJayAP . His work can be found at http://bigstory.ap.org/journalist/marley-jay