* 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 up 0.7 pct; S&P 500 up 0.6 pct; Nasdaq up 0.4 pct
(Updates to afternoon trading)
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, which offset 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 Thursday's biggest gainers, with the S&P
financial sector index up 1.7 percent. JPMorgan Chase &
Co gained 3.5 percent to $60.32, rising above $60 for
the first time since April 2000. Citigroup Inc shot up 2.6
percent to $50.22.
AT&T Inc ranked among the top percentage gainers in
both the Dow and the S&P 500, rising 2.5 percent to $33.78.
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 in the first half of next
year. She estimated 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," Davis said. "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 gained 107.66
points, or 0.66 percent, to 16,329.83. The Standard & Poor's 500
Index advanced 10.63 points, or 0.57 percent, to
1,871.40. The Nasdaq Composite Index rose 15.10 points,
or 0.35 percent, to 4,322.71.
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 500 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 stayed in focus as Russian troops
seized two Ukrainian naval bases, including a headquarters in
the Crimean port of Sevastopol.
President Barack Obama announced sanctions on Thursday
against prominent Russians, including close allies of President
Vladimir Putin, as Moscow raced to complete its annexation of
Crimea and built up its forces in the region. 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 War.
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 came
a day after KB Home posted similarly strong results in a
bullish read on the housing market.In Thursday afternoon
trading, Lennar's shares fell 1.9 percent to $40.56 and KB Home
lost 3 percent to $18.16.
Jabil Circuit Inc forecast 2015 core earnings above
Wall Street's estimates as the struggling contract electronics
maker expects to recover from the loss of its business with
BlackBerry Ltd . Jabil Circuit's stock slid 2.1
percent to $17.87.
First Solar rose 4.1 percent to $72.27 and was
among the S&P 500's biggest gainers, building on its jump of
more than 20 percent on Wednesday after the company gave a
strong outlook. The stock is on track for its fifth straight
daily rise, gaining almost 40 percent over that period.
On the downside, the Nasdaq's gains were limited by weakness
in large-cap internet shares. Amazon.com Inc fell 1.3
percent to $368.46 while Yahoo Inc dropped 1.1 percent
(Editing by Nick Zieminski and Jan Paschal)