Stocks rise on Fed talk of rate hikes

Stocks rose Friday to wrap up their strongest week in almost three months.

Banks gained ground after Federal Reserve Chair Janet L. Yellen said the central bank intends to keep raising interest rates if the economy continues to improve. Stocks turned higher over the last few hours of trading to finish at their highest levels of the day.

The Dow Jones industrial average rose 44.93 points, or 0.3%, to 17,783.22. The Standard & Poor’s 500 index added 8.96 points, or 0.4%, to 2,099.06. The Nasdaq composite index picked up 31.74 points, or 0.6%, to 4,933.50.

The Commerce Department said the U.S. economy was a bit stronger in the first quarter than it initially believed. The agency said the gross domestic product grew 0.8% in the first three months of the year, above its original estimate of 0.5%. That’s still sluggish, but experts think the economy will grow about 2% in the current quarter.

Bank stocks were led higher by Bank of America, which rose 18 cents, or 1.2%, to $14.88, and Citigroup, which picked up 47 cents, or 1%, to $46.58. Bank stocks have struggled this year because the Fed has pushed back plans to raise rates. Bond prices slipped and yields rose, another sign investors expect interest rates to increase. The yield on the 10-year U.S. Treasury note rose to 1.85% from 1.83%. The yield on the Treasury note is closely tied to interest rates.

Labor Secretary Thomas Perez said Verizon and its unions agreed in principle to a new four-year contract, helping Verizon gain 46 cents to close at $50.62.

Google’s parent company, Alphabet, rose after a federal jury said the company did not need permission to use tools made by Oracle when it built its Android software. Oracle contends that Google stole its intellectual property and sought $9 billion in damages, and it plans to appeal the ruling. Alphabet stock added $10.67, or 1.4%, to $747.60.

Benchmark U.S. crude oil lost 15 cents to $49.33 a barrel in New York. Brent crude, which is used to price international oil, fell 27 cents to $49.32 a barrel in London.

Scientific equipment maker Thermo Fisher said it will buy electron microscope maker FEI for $107.50 a share in cash, or about $4.2 billion. The deal comes about two months after Thermo Fisher paid $1.3 billion to buy Affymetrix, which makes equipment to analyze genetic codes. FEI shares climbed $13.55, or 14.3%, to $108.13, and Thermo Fisher added 93 cents to $152.13.

The price of gold fell $6.60 to $1,213.80. Gold has slipped about 5% over the last two weeks. Silver fell 7 cents to $16.27 an ounce. Copper rose 1 cent to $2.11 a pound.

Germany’s DAX and the FTSE 100 in Britain each rose 0.1%, and France’s CAC 40 gained a bit less than that. Japan’s benchmark Nikkei 225 index added 0.4% and South Korea’s Kospi gained 0.6%. Hong Kong’s Hang Seng climbed 0.9%.

The dollar rose to 110.38 yen from 109.72 yen. The euro fell to $1.1114 from $1.1191.