Wall Street up as Fed says on track to raise rates in 2015

By Tanya Agrawal

(Reuters) - U.S. stocks were modestly higher on Wednesday, set for a fifth straight day of gains, after Federal Reserve Chair Janet Yellen said the turmoil abroad was unlikely to affect the U.S. economy and that the Fed was on track to raise interest rates this year.

Yellen said she expects the economy to grow steadily for the rest of the year, allowing the Fed to hike rates, but gave no direct hint on the timing or pace of a hike.

"A rate hike will be additive to the U.S. equities as the U.S. economy requires something other than crisis-era rates," said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management in Minneapolis.

"The pace of the rate hike is more important than the timing of it as investors remain in pause mode with a modest downward basis."

Investor also await the outcome of a Greek parliament vote, where Prime Minister Alexis Tsipras is struggling to persuade unhappy leftist lawmakers to vote for a package of austerity measures and economic reforms to secure a bailout.

At 11:01 a.m. ET (1501 GMT) the Dow Jones industrial average was up 29.83 points, or 0.17 percent, at 18,083.41. The S&P 500 was up 4.29 points, or 0.2 percent, at 2,113.24 and the Nasdaq composite was up 18.45 points, or 0.36 percent, at 5,123.34.

Seven of the 10 major S&P 500 sectors were lower, but Bank of America and Celgene helped the financial and healthcare indexes, respectively, buck the trend.

Bank of America shares rose 3.2 percent to $17.67, poised for its best day in five months, after the bank reported its biggest quarterly profit in nearly four years.

Celgene jumped as much as 10.7 percent to a record high of $135.98 after the company said it would buy Receptos for $7.2 billion to get a potential multibillion-dollar drug.

Celgene's gains helped push the Nasdaq biotech index up more than 2 percent to hit a record high for the third time in three weeks.

Corporate America is expected to report its worst sales decline in nearly six years in the second quarter, while profit is expected to have fallen 2.9 percent, according to Thomson Reuters estimates.

"More important than the second-quarter results is the guidance that companies give for the second half of the year especially consumer staples and industrials," said Jeremy Zirin, chief investment strategist at UBS Wealth Management.

The uncertainty in the Chinese markets and the strong dollar will also be in focus this earnings season.

Delta Air Lines fell 1.7 percent to $42.94 after the carrier forecast a third-quarter drop in unit revenue, saying the strong dollar was hurting demand abroad. The warning weighed on other airline stocks.

Yum Brands fell 2.7 percent to $89.47 after the owner of Pizza Hut and KFC reported its fourth straight quarter of falling sales, indicating it is still struggling to regain lost ground in China after a food scandal last year.

Netflix was down 0.3 percent at $100.03 after it started trade for the first time after a seven-for-one stock split. Netflix and Intel are scheduled to report after the markets close.

Declining issues outnumbered advancers on the NYSE by 1,686. On the Nasdaq, 1,336 issues fell and 1,226 advanced.

The S&P 500 index showed 21 new 52-week highs and four new lows, while the Nasdaq recorded 106 new highs and 27 new lows.

(Editing by Savio D'Souza)