US shares firmed at midsession on Tuesday after Federal Reserve Chair Janet Yellen’s comments continued to calm markets and the oil price headed above $50 a barrel.
The rise on Wall Street was in tandem with world stocks which advanced on Tuesday while the US dollar was near a four-week low against a basket of currencies, a day after Yellen expressed confidence in the health of the US economy but offered no fresh hints on the timing of the next interest rate hike.
The MSCI world equity index which tracks shares in 45 nations, rose to the highest in more than five weeks, and oil prices climbed to a fresh 2016 peak, buoyed by the softer dollar and supply worries.
The S&P 500 index was up 0.4% at 2,117 while the S&P Midcap 400 was up 0.5% at 1,520, led by United Natural Foods (NASDAQ:UNFI) and Patterson-UTI Energy (NYSE:PTEN).
The S&P Smallcap 600 was up 0.6% at 721, led by Big 5 Sporting (NASDAQ:BGFV) and Pioneer Energy Services (NYSE:PES).
The US oil benchmark West Texas Intermediate was up 1.5% at $50.41 – its highest level since late July.
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As expected, Wall Street shares headed higher on Tuesday as traders appeared to welcome the Fed tone on interest rates, European indices rose and the oil price rose.
Yesterday, Janet Yellen had indicated that a rise this month (June) was not in the frame.
The S&P500 hit a seven month high, and is up 0.2%to 2,113, while the benchmark Dow Jones added 0.35% to 17,985.
The tech heavy Nasdaq added a tad- 0.02% to go to 4,969. The S&P midcap 400 gained 0.11% to 1,514. The S&P smallcap 600 added 0.07% to 7817.87.
It came as traders appeared to ignore US government data that showed productivity of businesses and workers fell in the first quarter.
In addition, new figures suggested wage inflation is ticking up, at odds seemingly with the Fed's stance on monetary policy and interest rates.
Benchmark US crude - West Texas Intermediate - was up 1% to US$50.18 a barrel in New York, and oil shares were in focus.
Giant Chevron (NYSE:CVX) rose 1.3% to US$102.53 a share, while Newfield Exploration added 3% to US$41.16.
A big loser was troubled drugs firm Valeant Pharmaceuticals Intl Inc (NYSE:VRX), which plunged around 20% after first quarter results disappointed.
Valeant, which is already under scrutiny, also cut its guidance for the full year. The drug company now expects between US$9.9bn and U$10.1bn of revenue in 2016, down from US$11bn to US$11.2bn.
Full year earnings are now forecast by the company at US$6.60 to US$7.00 per share, down from US$8.50 to US$9.50.