* Philly Fed far stronger than expected in March
* Financial stocks among the day's biggest gainers
* Yellen raises uncertainty about timing of rate hike
* Dow, S&P 500 and Nasdaq all rise 0.4 pct
(Updates with housing and Philly Fed data)
By Ryan Vlastelica
NEW YORK, March 20 U.S. stocks rose on Thursday,
boosted by a read on factory activity that was much stronger
than expected, although investors continued to grapple with the
prospect of an earlier-than-expected rate hike.
Wall Street opened lower but reversed course after the
Philadelphia Federal Reserve Bank said its business activity
index rose far more than expected in March, rebounding after a
contraction in February. In another positive
report, jobless claims rose less than expected in the latest
The data "shows that fundamentals are getting stronger every
day, and that strength is getting firmer," said Frank Davis,
director of sales and trading at LEK Securities in New York.
Financial shares, which are tied to the pace of economic
growth, were among the biggest gainers on Thursday, with the S&P
financial group up 1.1 percent. JPMorgan Chase & Co
gained 2.2 percent to $59.58 while Citigroup Inc
added 1.9 percent to $49.87.
In her first press conference as chair of the Federal
Reserve, Janet Yellen on Wednesday indicated that the first
increase in interest rates could come early next year,
estimating the "considerable period" between the end of the
Fed's stimulus and its first rate increase at possibly six
months. Analysts widely expected a hike in the second half of
"We're trying to decipher her timeframe and get ahead of
it," said Davis. "While we didn't make any drastic changes to
our positions as a result of what she said, we have a tight
watch on her to figure out how she'll play her hand."
The Dow Jones industrial average was up 65.60 points,
or 0.40 percent, at 16,287.77. The Standard & Poor's 500 Index
was up 6.47 points, or 0.35 percent, at 1,867.24. The
Nasdaq Composite Index was up 15.85 points, or 0.37
percent, at 4,323.45.
The S&P 500 is within 1 percent of its record closing high,
but volume has been anemic on positive market days, suggesting
limited conviction behind the move. According to the latest
Reuters poll of analysts, the S&P is expected to end 2014 at
1,950, less than 5 percent above current levels.
Volume is expected to surge on Friday as options expiration
takes place alongside multiple index rebalances. Credit Suisse
estimates $14 billion in gross trading will stem from the S&P
500 index rebalance, with another $6 billion coming from
rebalancing in other indexes.
Geopolitical concerns continued to be in focus as Russian
troops seized two Ukrainian naval bases, including a
headquarters in the Crimean port of Sevastopol. The United
States warned Russia that it was on a "dark path" to isolation
in the biggest crisis between the two countries since the Cold
While few U.S. companies have outsized exposure to the
region, investors are concerned about the fallout from any
escalation in tension.
Lennar Corp reported a sharp jump in its
first-quarter profit, helped by higher prices. The results come
a day after KB Home posted similarly strong results in a
bullish read on the housing market. Shares of Lennar dipped 0.1
percent to $41.24.
Jabil Circuit Inc forecast 2015 core earnings above
Wall Street estimates as the struggling contract electronics
maker expects to recover from the loss of its business with
BlackBerry Ltd . Shares dipped 0.7 percent to
U.S. shares of GlaxoSmithKline fell 1.4
percent to $53.93 after an experimental cancer vaccine failed in
a second test, but the British pharmaceutical company said it
still hoped to identify a sub-group of patients in which it
(Editing by Nick Zieminski)