By Anora Mahmudova and Sara Sjolin, MarketWatch

Major indexes on track for weekly gains

U.S. stocks inched higher on Friday, with investors hesitant to make major moves ahead of a speech by Federal Reserve Chairwoman Janet Yellen and a long holiday weekend.

The benchmark S&P 500 index is on track to end the week with the biggest gains in nearly two months.

U.S. markets will be closed on Monday for the Memorial Day (http://www.marketwatch.com/story/when-do-markets-close-for-memorial-day-2016-05-25) holiday.

The S&P 500 was up 5 points, or 0.2%, to 2,094 with nine of its ten main sectors trading higher. Energy shares were weighed down by falling oil prices.

The Dow Jones Industrial Average gained 26 points, or 0.2%, to 17,852. Meanwhile, the Nasdaq Composite advanced 17 points, or 0.4%, at 4,919.

"The gains on the S&P 500 this week have been driven by several factors: oil going over $50 a barrel, gains in Asian and European markets, decreased anxiety about Brexit and big jumps in home sales," said Randy Frederick, managing director of Trading & Derivatives at Schwab Center for Financial Research.

Frederick said the 2,100 area on the S&P 500 is likely to offer some resistance, however. "It is possible that by the end of the month or early June we go to all-time highs, but until we are through with Brexit and a rate hike in July, markets are likely to be rangebound," Frederick said.

U.S. stocks closed little changed (http://www.marketwatch.com/story/us-stock-futures-catch-their-breath-after-dow-jumps-359-points-in-2-days-2016-05-26) on Thursday after two days of strong gains, which came on the back of upbeat economic data and oil prices moving above $50 a barrel. However, the rally started to fizzle later Thursday as crude failed to hold above $50.

Both West Texas Intermediate crude oil and Brent continued to fall on Friday (http://www.marketwatch.com/story/oil-spends-less-than-a-day-above-50-as-investors-cash-in-ahead-of-opec-2016-05-27).

Waiting for Yellen: The Fed chief pays a high-profile visit to Harvard University on Friday, where she's scheduled to deliver a speech at 1:15 p.m. Eastern Time. Investors are eager to hear any views (http://www.marketwatch.com/story/feds-yellen-may-send-interest-rate-message-by-not-making-one-2016-05-25) on the interest rate outlook, after a week of hawkish comments from prominent Fed members.

Earlier this month, minutes from the U.S. central bank's April meeting took markets by surprise by indicating a rate increase in June is still on the table.

The ICE dollar index was up 0.2% to 95.335 (http://www.marketwatch.com/story/dollar-holds-tight-as-investors-wait-for-yellen-to-speak-later-2016-05-27) ahead of Yellen's appearance.

After the hawkish minutes, expectations for a rate hike this summer increased. Fed funds futures, which two weeks ago were pricing in only a 4% probability of a June rate hike, were signaling a 26% chance on Friday, according to the CME Fed Watch tool. The probability of a July rate hike is at 55%.

Economic news: U.S. first-quarter economic growth (http://www.marketwatch.com/story/first-quarter-us-gdp-raised-to-08-2016-05-27)was revised up to 0.8% from a previous reading of 0.5%, based on a fresh estimate that shows somewhat stronger home construction and restocking of warehouse shelves.

Consumer sentiment eased slightly (http://www.marketwatch.com/story/consumer-sentiment-pulls-back-as-election-uncertainty-weighs-2016-05-27)in late but remained higher than in April as household views of the economy and finances stabilized.

Market reaction to both reports was muted.

At the Group of Seven meeting in Japan, political leaders warned of rising risks to the global economy (http://www.marketwatch.com/story/g-7-warns-against-currency-wars-reliance-on-new-monetary-policy-tools-2016-05-27), but stopped short of announcing any coordinated plan to tackle the concerns.

Movers & shakers: Shares of Ulta Salon Cosmetics & Fragrance Inc.(ULTA) jumped 9%. Earnings from the makeup retailer released late Thursday topped Wall Street estimates (http://www.marketwatch.com/story/ulta-shares-rally-after-earnings-top-street-view-2016-05-26).

Valeant Pharmaceuticals International Inc.(VRX.T) rose 8.4% after a report said it had received and rejected a takeover offer (http://www.marketwatch.com/story/valeant-rejected-takeover-bid-from-takeda-tpg-report-2016-05-26) earlier this year from Japan's Takeda Pharmaceutical Co.(4502.TO) and private-equity firm TPG.

Big Lots Inc.(BIG) rallied 11% after the discount retailer boosted its outlook for the year (http://www.marketwatch.com/story/big-lots-raises-guidance-as-profit-increases-20-2016-05-27) and reported a 20% rise in profit.

Alphabet Inc.(GOOGL) inched 0.6% higher after the Google-parent on Thursday won a jury verdict (http://www.marketwatch.com/story/google-beats-oracle-in-landmark-case-involving-use-of-java-apis-in-android-2016-05-26) in a long-running case against Oracle Corp.(ORCL)

GameStop Corp.(GME) slumped 5.7% after the videogame retailer late Thursday reported an 11% drop in earnings (http://www.marketwatch.com/story/gamestop-posts-decline-in-revenue-profit-2016-05-26-174853626).

Other markets: European markets were mixed (http://www.marketwatch.com/story/european-stocks-edge-lower-with-yellen-speech-ahead-2016-05-27), taking a breather after a three-day rally (http://www.marketwatch.com/story/european-shares-waver-as-spanish-banks-slide-oil-stocks-rise-2016-05-26).

Markets closed mostly higher in Asia (http://www.marketwatch.com/story/asian-shares-head-for-third-straight-week-of-gains-2016-05-27), but traders there were cautious ahead Yellen's comments later on Friday.

Gold futures (http://www.marketwatch.com/story/golds-slide-extends-into-8th-day-brings-drop-in-may-to-55-2016-05-27) extended their slide on Friday, on track to log an eighth straight drop, as U.S. dollar strength in May helped push precious metals prices to their lowest level since early April.

(END) Dow Jones Newswires

May 27, 2016 10:49 ET (14:49 GMT)

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