U.S. stocks closed higher Monday, with energy leading as oil rose, after comments from Fed Chair Janet Yellen remained positive on the economy while omitting a specific reference to the timing of a rate hike.
The S&P 500 closed at its highest since Nov. 3 and 1.1 percent below its 52-week intraday high set last July. Energy jumped about 2 percent in its best day since April, as U.S. crude oil futures settled at their highest since July.
"You have oil prices moving higher and that's been helpful," said Quincy Krosby, market strategist at Prudential Financial.
"The market right now needs to have growth. It also needs to have earnings revisions moving in a positive direction, which they are," she said. "If the GDP forecast continues to stay above two percent, I think it satisfies the need for the market at this valuation."
Yellen's midday remarks at the World Affairs Council of Philadelphia did not give a specific time period for the next hike but said the Fed funds rate probably needs to rise gradually over time. Yellen said while the overall labor market situation has been quite positive, Friday's report was "disappointing."
The market "realized pretty quickly she wasn't talking about a rate hike next week," said Robert Pavlik, chief market strategist at Boston Private Wealth. "I think one's coming but that shouldn't knock the market off this level. A rate hike followed by an indication that another would soon follow, that would knock the market off."
The U.S. dollar index came off session lows to trade mildly lower, with the euro near $1.136 and the yen around 107.6 yen against the greenback. The dollar index fell nearly 1.7 percent Friday in its worst day since early December.
"I still think July is still a possibility. I think June is off the table," said John Caruso, senior market strategist at RJO Futures.
On May 27, Yellen had said a rate hike in the next few months would probably be appropriate.