Wall Street rises on Yellen's view; S&P scores modest first quarter gain

NEW YORK Mon Mar 31, 2014 6:41pm EDT

Traders William Lawrence and Justin Flinn (R) work on the floor of the New York Stock Exchange March 28, 2014. REUTERS/Brendan McDermid

Traders William Lawrence and Justin Flinn (R) work on the floor of the New York Stock Exchange March 28, 2014.

Credit: Reuters/Brendan McDermid

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NEW YORK (Reuters) - U.S. stocks rose on Monday, with the S&P 500 ending both March and the first quarter of 2014 with moderate gains, after Federal Reserve Chair Janet Yellen relieved concerns about a rate hike coming earlier than expected.

This was the fifth straight quarterly rise for both the S&P 500 and the Nasdaq, though it was the smallest three-month advance for both since the fourth quarter of 2012. Both the Dow and the S&P 500 rose for a second straight month in March.

Gains were broad, with nine of the S&P 500's 10 sector indexes rising for the day. About 73 percent of stocks traded on both the New York Stock Exchange and the Nasdaq closed higher.

The S&P materials sector index .SPSMCM was the best performer, jumping 2.1 percent, while the S&P utility sector index .SPSMCU advanced 1.3 percent.

Technology and financial shares, which along with materials are tied to the pace of economic growth, also outperformed for the day. Micron Tech (MU.O) climbed 8 percent to $23.66, ranking as the S&P 500's top percentage gainer. Oracle Corp (ORCL.N) rose 3.4 percent to end at $40.91.

In her first public speech since becoming Fed chair two months ago, Yellen said that the U.S. central bank's "extraordinary" commitment to boosting the economy would be needed for some time to come.

Earlier this month, Yellen raised concerns by saying that the period between the end of the Fed's quantitative easing program and the first rate increase from the central bank could be six months, a faster timeline than many had anticipated.

"What Yellen did today was to alleviate that confusion and provide more clarity. When there aren't concerns about the Fed tightening, the market can breathe easier," said Joseph Tanious, global market strategist at J.P. Morgan Asset Management in New York.

Equities also received a boost from end-of-quarter "window dressing," when money managers adjust positions to improve the look of their portfolios.

Biotech stocks stayed in focus following recent volatility when investors sharply took profits in the high-flying sector. The Nasdaq Biotechnology index .NBI jumped 3 percent, following a 7 percent drop last week, in what was the index's fifth consecutive weekly decline.

Among some of the more active names, Vertex Pharmaceuticals (VRTX.O) climbed 4.3 percent to end at $70.72 and Biogen Idec (BIIB.O) added 4 percent to close at $305.87.

The Dow Jones industrial average .DJI shot up 134.60 points, or 0.82 percent, to end at 16,457.66. The Standard & Poor's 500 Index .SPX gained 14.72 points, or 0.79 percent, to close at 1,872.34. The Nasdaq Composite Index .IXIC climbed 43.24 points, or 1.04 percent, to finish at 4,198.99.

The S&P 500 rose 0.7 percent in March and gained 1.3 percent in the first quarter. The Dow rose 0.8 percent for the month, but fell 0.7 percent in the quarter. The Nasdaq fell 2.5 percent for March, but rose 0.5 percent in the quarter.

The Institute for Supply Management-Chicago business barometer was at 55.9 in March, its lowest level since August, and down from 59.8 in February. Economists' median forecast in a Reuters poll was 59.0.

U.S.-listed shares of Prana Biotechnology Ltd (PRAN.O) plunged 71.6 percent to close at $2.80 after the company said its experimental drug to treat Alzheimer's disease failed to meet the main goal of a mid-stage study in patients with a mild form of the condition.

Logistics company UTi Worldwide Inc (UTIW.O) reported a bigger-than-expected quarterly loss, hurt by weak demand for air freight as customers opted for cheaper modes of shipping. Shares slumped 6 percent to close at $10.59.

About 5.28 billion shares traded on all U.S. platforms, according to BATS exchange data, below the 6.9 billion average so far this month, according to data from BATS Global Markets.

(Editing by Bernadette Baum, Nick Zieminski and Jan Paschal)

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