Investing.com - U.S. stocks rose on Monday after Federal Reserve Chair Janet Yellen said the economy will continue to see monetary support for time to come even as recovery ensues.
At the close of U.S. trading, the Dow 30 rose 0.82%, the S&P 500 rose 0.79%, while the Nasdaq rose 1.04%.
In her first major speech as Fed Chair, Yellen told the National Interagency Community Reinvestment Conference in Chicago, Illinois, that the U.S. economy still needs monetary support to ensure more sustained recovery.
"I believe it is appropriate for the Federal Reserve to continue to provide substantial help to the labor market, without adding to the risks of inflation, is because of the evidence I see that there remains considerable slack in the economy and the labor market," Yellen said in prepared remarks of her speech.
The Fed is currently purchasing $55 billion in bonds a month to spur recovery, a monetary policy tool known as quantitative easing that suppresses long-term interest rates to prop up the economy, boosting stocks with the hope investing and hiring ensue.
"I think this extraordinary commitment is still needed and will be for some time, and I believe that view is widely shared by my fellow policymakers at the Fed," Yellen said.
Yellen's words sent investors reevaluating the pace at which the U.S. central bank will taper its bond-buying program let alone begin hiking benchmark interest rates, and stocks rose on the notion that policy will remain loose while the economy continues to improve and bring corporate fundamentals up with it.
Leading Dow Jones Industrial Average performers included United Technologies Corporation (NYSE:UTX), up 1.76%, Microsoft Corporation (NASDAQ:MSFT), up 1.72%, and Visa Inc (NYSE:V), up 1.66%.
The Dow Jones Industrial Average's worst performers included Coca-Cola Enterprises Inc (NYSE:CCE), down 0.76%, American Express Company (NYSE:AXP), down 0.43%, and Caterpillar Inc (NYSE:CAT), down 0.02%.
European indices, meanwhile, finished lower.
After the close of European trade, the DJ Euro Stoxx 50 fell 0.17%, France's CAC 40 fell 0.45%, while Germany's DAX fell 0.33%. Meanwhile, in the U.K. the FTSE 100 fell 0.26%.
On Tuesday in the U.S., the Institute of Supply Management is to publish a report on U.S. manufacturing growth.