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 is healthy enough. Verizon agreed in principle to a new contract with its striking landline and cable employees, and telecom stocks edged higher.

KEEPING SCORE: The Dow Jones industrial average rose 23 points, or 0.1 percent, to 17,851 as of 2:30 p.m. Eastern time. The Standard & Poor’s 500 index added 5 points, or 0.3 percent, to 2,094. The Nasdaq composite index picked up 23 points, or 0.5 percent, to 4,924. 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 keeps improving. 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 11 cents to $14.81 and Citigroup picked up 31 cents to $46.42.

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.

THE QUOTE: “The Fed’s kind of walking a tight rope here,” said Jon Adams, senior investment strategist for BMO Global Asset Management. “It seems like every time the Fed threatens a rate increase we get a rise in the dollar (and) we get a significant fall in equities.”

He said that might be changing, however, because economic growth and inflation seems to be picking up.

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.

TAKE THE CALL: 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 48 cents to $50.64.

ENERGY: Benchmark U.S. crude oil lost 26 cents to $49.22 a barrel in New York. Brent crude, which is used to price international oils, gave up 31 cents to $49.86 a barrel in London. Energy companies traded lower and Anadarko Petroleum lost $1.09, or 2.1 percent, to $51.19.

VANDA SURGES: Vanda Pharmaceuticals climbed after the Food and Drug administration granted a new marketing approval for its schizophrenia drug Fanapt.

The company said it could get additional marketing exclusivity for Fanapt as a result. That could bolster sales of the drug, which was originally approved in 2009.

Vanda stock rose 93 cents, or 9.8 percent, to $10.42.

PRETTY, GOOD: Ulta Salon, Cosmetics and Fragrance posted strong first-quarter results and raised its estimates for the year. Its stock advanced $17.79, or 8.3 percent, to $231.48.

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 $4.04, or 16.6 percent, to $20.29.

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 $13.39, or 14.2 percent, to $107.97 and Thermo Fisher added 45 cents to $151.65.

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.

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 110.31 yen from 109.72 yen. The euro dipped to $1.1114 from $1.1191.

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