Major U.S. stock indexes managed to eke out tiny gains on Wall Street after a day of wavering between small gains and losses.
Banks climbed Friday as investors priced in an increasing likelihood that interest rates will rise in the coming months.
Federal Reserve Chair Janet Yellen helped stoke those expectations in a speech in which she said an improving job market and rising inflation would likely prompt the Fed to increase borrowing costs.
KeyCorp and Comerica each rose 1 percent.
Other parts of the market lagged. Real estate companies fell the most.
The Standard & Poor’s 500 index rose 1 point to 2,383. The Dow Jones industrial average edged up 2 points to 21,005. The Nasdaq composite increased 9 points, or 0.2 percent, to 5,870.
OIL PRICES: At midafternoon, benchmark U.S. crude oil rose was up 66 cents at $53.27 a barrel in electronic trading on the New York Mercantile Exchange. In London on the Intercontinental Exchange Europe, Brent crude, the standard for pricing international oils, rose 74 cents to $55.82 a barrel.
RATE HIKE LIKELY: Speaking in Chicago on the Fed’s economic outlook, Yellen said the Fed will likely resume raising interest rates later this month to reflect a strengthening job market and inflation edging toward the central bank’s 2 percent target rate. Yellen added that the central bank expects steady economic improvement to justify additional rate increases. While not specifying how many rate hikes could occur this year, Yellen noted that Fed officials in December had estimated that there would be three this year. Yellen was the latest Fed official to signal in recent days that the central bank is ready to resume raising rates as soon as its next two-day meeting of policymakers on March 14-15.
ANALYST’S OPINION: “The real takeaway here is if the Fed is willing to start moving, they see the economy as not only doing better but likely to do better going forward,” said Brad McMillan, chief investment officer at Commonwealth Financial Network. “The Fed is notorious for waiting until the evidence of growth is absolutely undeniable.”