Wall St Pares Gains as Yellen Omits Reference to Rate Hike Timing

U.S. stocks pared some of their gains on Monday after Federal Reserve Chair Janet Yellen painted a mostly positive picture of the economy and said interest rates were still on their way, but was less specific on the timing.

Yellen said "positive economic forces have outweighed the negative", but was more vague in her references to the timing of a rate hike than she had been in early May when she said the Fed could move "in coming months".

Yellen's remarks, the last public comment from any U.S. central banker before a policy meeting next week, comes after Friday's dismal monthly jobs report raised concerns over the ability of the economy to absorb a rate hike as early as June.

Yellen called the jobs report "disappointing", but said "one should not attach too much significance to a single report."

"Yellen's speech tells me that the Fed is going to follow through with what all the Fed governors have been saying in the past six weeks," said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago.

Despite paring some gains, the Nasdaq and the S&P 500 were on course for their highest one-day percentage gains since May 27. The Dow was set for its best day since May 25, the last time it ended up more than triple digits in terms of points.

"The market is interpreting them as relatively mixed, if anything marginally less hawkish, but there's not a great deal of clear market direction in these comments yet," said Ian Lyngen, senior government bond strategist at CRT Capital in Stamford, Connecticut.

At 12:58 p.m. ET (1658 GMT) the Dow Jones Industrial Average was up 66.64 points, or 0.37 percent, at 17,873.7.

The S&P 500 was up 4.45 points, or 0.21 percent, at 2,103.58 and the Nasdaq Composite was up 13.57 points, or 0.27 percent, at 4,956.09.

Six of the 10 major S&P sectors were higher, led by the energy index's 1.3 percent gain although crude prices pared gains sharply after Yellen's remarks.

The financial index also pared some gains and was up 0.4 percent. The index dropped 1.4 percent on Friday, weighing on the entire market, as chances of a rate hike in June faded.

AbbVie was down 4.5 percent at $61.95 after Cowen cut its rating on the stock to "market perform" from "outperform".

Advancing issues outnumbered decliners on the NYSE by 1,889 to 1,084. On the Nasdaq, 1,839 issues rose and 905 fell.

The S&P 500 index showed 34 new 52-week highs and one new low, while the Nasdaq recorded 68 new highs and 20 new lows. (Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Savio D'Souza)