* Yellen gives no indication of rate hike timing
* Financial stocks set for best day in three weeks
* Herbalife drops on report of Icahn’s planned stake sale
* Indexes up: Dow 0.45 pct, S&P 0.47 pct, Nasdaq 0.54 pct (Adds details, comments, updates prices)
By Yashaswini Swamynathan
Aug 26 (Reuters) - Wall Street rose on Friday after Federal Reserve Chair Janet Yellen said the case for increasing interest rates had strengthened, but did not indicate when the Fed would raise rates.
Yellen said the economy was nearing the central bank’s goals of maximum employment and price stability, but maintained that future hikes should be “gradual”.
U.S. stocks nearly flat-lined immediately after Yellen’s comments, but surged soon after, with all 10 major S&P 500 sectors trading higher.
“She’s certainly tried to make a case, but the market doesn’t believe that the Fed is going to actually raise rates,” said Brent Schutte, chief investment strategist at Northwestern Mutual Wealth Management.
“Investors are struggling to find anything new in the speech and that maybe by-design by Yellen.”
After Yellen’s speech, traders cut their odds of a rate hike in September to 18 percent from 21 percent, and slightly raised the chances of a December hike to 43.1 percent from 41.4 percent, according to CME Group’s FedWatch tool.
At 10:52 a.m. ET the Dow Jones Industrial Average was up 82.93 points, or 0.45 percent, at 18,531.34.
The S&P 500 was up 10.25 points, or 0.47 percent, at 2,182.72.
The Nasdaq Composite was up 28.35 points, or 0.54 percent, at 5,240.56.
The CBOE Volatility index, known as Wall Street’s “fear gauge”, was down 7.5 percent, dropping for the first time this week.
A near 0.8 percent rise in technology and healthcare stocks led the gains on the S&P.
Financials, which stand to benefit the most if rates are hiked, were up 0.6 percent and on track for their best one-day percentage gain in three weeks.
Shares of Herbalife fell 4.7 percent to $59.04 after a report said Carl Icahn, the nutritional supplement maker’s top shareholder, was looking to sell his stake.
Ulta Salon also fell 4.7 percent and was the top percentage loser on the S&P 500 after giving a disappointing forecast for the current quarter.
Advancing issues outnumbered decliners on the NYSE by 2,110 to 682. On the Nasdaq, 1,781 issues rose and 807 fell.
The S&P 500 index showed 27 new 52-week highs and one new low, while the Nasdaq recorded 94 new highs and 12 new lows. (Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Savio D‘Souza)