By Tanya Agrawal
REUTERS - U.S. stocks were higher but off their peaks on Friday after Federal Reserve Chair Janet Yellen said she expected the Fed to raise interest rates at some point this year, while expressing concern that the U.S. labor market remained weak.
Yellen gave no direct hint about whether the central bank would raise rates more than once over the course of its four remaining meetings in 2015.
The Fed has kept interest rates at near zero since the 2008 financial crisis.
Global markets rose earlier on hopes that Greece will be able secure fresh funding to avert bankruptcy and allow it to remain in the euro zone.
All three major indexes were up well over 1 percent in early afternoon trading, with the Dow Jones industrial average and S&P 500 in positive territory for the month.
Greece has made substantial concessions in its latest proposal to lenders, including tax hikes, in hopes of receiving $59 billion to help it cover debts until 2018.
Euro zone finance ministers will meet on Saturday to decide on a third bailout for Athens.
U.S. markets fell sharply earlier in the week as concerns over a slowdown in China, a drop in commodity prices and the Greek debt crisis spooked investors.
"The markets are higher today because the combined pressure of Greece and China seem to have been elevated a little," said Mohannad Aama, managing director at Beam Capital Management in New York. "Greece isn't a done deal but the probability of a 'Grexit' is reducing."
Markets were supported by a continued recovery in China's stock market, which rose strongly for a second day, helped by a barrage of government support measures.
At mid-week, panic selling had slashed a third of the value off Chinese markets since their peak in June.
Chinese Premier Li Keqiang said the country would make more targeted changes to its policies to support the economy and promised to increase the transparency of China's capital and money markets.
Data showed U.S. wholesale inventories rose at their fastest pace in six months in May.
At 12:48 p.m. ET the Dow Jones industrial average was up 211.16 points, or 1.20 percent, at 17,759.78, the S&P 500 was up 24.97 points, or 1.22 percent, at 2,076.28 and the Nasdaq Composite was up 68.79 points, or 1.40 percent, at 4,991.18.
All 10 major S&P 500 sectors were higher, with the technology index leading advancers with a 1.48 percent rise.
The U.S. quarterly earnings season kicked off earlier this week, with Pepsi and Alcoa reporting better-than- expected sales. However, corporate earnings are estimated to have fallen 3.1 percent in the second quarter, according to Thomson Reuters data.
Barracuda Networks' shares slumped 20.9 percent to $30.94 after JPMorgan cut its price target on the data storage and security provider's stock.
Cablevision jumped 7 percent at $26.59 on a Wall Street Journal report that French billionaire Patrick Drahi was looking at cable targets for acquisitions.
Zillow fell 5.8 percent to $80.34, a day after the company said its chief financial officer was leaving the company to pursue other business interests.
Advancing issues outnumbered decliners on the NYSE by 2,380 to 606. On the Nasdaq, 2,096 issues rose and 608 fell.
The S&P 500 index posted 13 new 52-week highs and 12 new lows, while the Nasdaq recorded 66 new highs and 45 new lows.
(Reporting by Tanya Agrawal; Editing by Ted Kerr)
