Stocks overcame a weak manufacturing report today, making strong gain on reassuring words from Federal Reserve Chairwoman Janet Yellen. By the end of the session, the Dow Jones Industrial Average (DJINDICES:^DJI) was up 135 points or 0.8%, and the S&P 500 increased the same percentage. For the quarter, the Dow finished down by 0.8%, while the S&P gained 1.3%.
This morning, Yellen stood by the Fed's accommodative monetary policy, saying that it plans to continue its "extraordinary" commitment to bringing the economy back to full strength and lowering the unemployment rate. Speaking at a community reinvestment conference, she said that "scars from the Great Recession remain, and reaching our goals will take time." The statement was particularly encouraging, coming after a sell-off last week when Yellen said the central bank could raise interest rates as soon as a year from now.
Also this morning, the Chicago PMI came in below expectations, falling to 55.9, its lowest level in eight months. The figure was down from 59.8 in February, and short of estimates at 60.1. It could foreshadow a drop in tomorrow's ISM Index, which is projected to hit 54.0.
Turning to individual stocks, shares of General Motors (NYSE:GM) fell 0.9% after its product recall expanded to another 1.5 million vehicles as the carmaker said they may unexpectedly lose their power steering ability. The latest announcement brings the grand total of vehicles recalled to 6.26 million, making 2014 a forgettable year thus far for the venerable auto manufacturer. The news comes a day before CEO Mary Barra is set to testify before Congress about the widespread safety issues. In written testimony, Barra apologized to families who lost loved ones to the vehicle flaws and said the company plans to investigate why it took so long to discover the problems. GM shares are off 15% this year, though the damage could be worse. Shares could move once again tomorrow, as Barra's testimony is scheduled for 2 p.m.
Moving the opposite direction today was Vipshop Holdings (NYSE:VIPS), rallying 8% after getting an endorsement from Goldman Sachs. The investment bank noted the Chinese online retailer's growth potential, saying its "growing credibility as a leader in discount retail in China will allow it to introduce more global brands, thereby attracting more customers, creating a virtuous cycle." Vipshop shares have shot up a whopping 23 times since its IPO two years, and look poised for more growth after today's endorsement.