US stocks rise as Yellen points to early rate hike

US stocks rose in early trade Friday after Federal Reserve Chair Janet Yellen said the US economy was sound and the argument had grown for an interest rate increase.

Yellen lifted the cloud of uncertainty over the Fed's monetary policy direction in a speech at a central banking symposium in Jackson Hole, Wyoming, saying: "The case for an increase in the federal funds rate has strengthened in recent months."

That raised expectations for an increase in the benchmark federal funds rate before the end of the year, and as early as the Fed's next policy meeting in September.

After a slight rise at the open of trade, at 1445 GMT the Dow Jones Industrial Average was up 0.5 percent at 18,538.05.

The broad-based S&P 500 added 0.5 percent at 2,183.77, while the tech-rich Nasdaq Composite rose 0.6 percent to 5,243.95.

But after sharp swings, the US dollar was flat against the euro at $1.1286 and slightly lower against the yen at 100.28 yen.

Yellen stressed as usual that policy moves were dependent on economic data.

And in a possible reference to both the British vote to exit the European Union and the looming US presidential election, she noted that "monetary policy will need to respond to whatever disturbances may buffet the economy."

The market reaction, Ian Shepherdson of Pantheon Macroeconomics said, suggests that "some investors were expecting something more explicit."

"With inflation still below the target, action remains contingent on the data," he said.

In individual stocks, chip maker Intel led the action on the Dow blue chip list, gaining 1.2 percent. Caterpillar was up 1.0 percent.

Bank shares were higher, with Bank of America adding 1.1 percent and Goldman Sachs 0.8 percent.

Gold stocks jumped on a 1.1 percent gain in the gold price.