U.S. stocks rally after Yellen speech, spending data

U.S. stocks rose in the morning session on Monday as Wall Street continued to digest a key speech from U.S. Federal Reserve Chair Janet Yellen and the newly-released spending data.

At midday, the Dow Jones Industrial Average increased 121.97 points, or 0.66 percent, to 18,517.37. The S&P 500 added 12.87 points, or 0.59 percent, to 2,181.91. The Nasdaq Composite Index was up 21.46 points, or 0.41 percent, to 5,240.37.

"In light of the continued solid performance of the labor market and our outlook for economic activity and inflation, I believe the case for an increase in the federal funds rate has strengthened in recent months," Yellen addressed central bankers at a conference in Jackson Hole, Wyoming, on Friday.

Pointing to solid growth in household spending and a strengthening job market, Yellen said the U.S. economy is "now nearing" the Fed's statutory goals of maximum employment and price stability.

Analysts said it's possible for the Fed to hike interest rates as soon as September. But about 71 percent of 62 economists surveyed by the Wall Street Journal this month believed the Fed will wait until December to raise rates.

On the economic front, U.S. personal income in July increased by 71.6 billion U.S. dollars, or 0.4 percent, and personal consumption expenditures increased by 42.0 billion dollars, or 0.3 percent, reported the Commerce Department on Monday. Both figures were in line with market estimates. Endit