U.S. stocks gain on Yellen comments, U.S. data; Dow up 0.54%

Investing.com - U.S. stocks rose on Friday after weak U.S. industrial production data preceded by dovish statements delivered by Federal Reserve Chair Nominee Janet Yellen to Congress on Thursday left many investors convinced stimulus tools will stay in place for the near future.

Stimulus tools such as the Fed's USD85 billion in monthly bond purchases aim to spur recovery by driving down interest rates, boosting stock prices in the process.

At the close of U.S. trading, the Dow Jones Industrial Average finished up 0.54%, the S&P 500 index rose 0.42%, while the Nasdaq Composite index rose 0.33%.

The Federal Reserve reported earlier that U.S. industrial production contracted 0.1% in October after having increased 0.7% in September.

Analysts were expecting a 0.2% expansion, and the surprise contraction fanned sentiments the Fed won't scale back its USD85 billion in monthly bond purchases until early 2014, which gave stocks, the primary beneficiary of ultra-loose monetary policies, a shot in the arm on Friday.

On Thursday, Fed Chair Nominee Janet Yellen told the Senate Banking Committee that while the economy is on the mend, inflation and unemployment rates have room to move closer to Fed comfort zones, which markets interpreted as a sign the U.S. central bank wants to see consistent improvements to economic indicators before winding down stimulus tools.

Her comments put to rest lingering expectations that the Fed may announce plans to scale back stimulus tools at its December meeting.

Also in the U.S., the Federal Reserve of Bank of New York said its manufacturing activity index declined to -2.21 in November from 1.52 in October, defying expectations for a rise to 5.00.

Leading Dow Jones Industrial Average performers included Exxon Mobil, up 2.21%, Home Depot, up 1.37%, and American Express, up 1.11%.

The Dow Jones Industrial Average's worst performers included McDonald's, down 0.66%, Microsoft, down 0.43%, and United Technologies, down 0.08%.

European indices, meanwhile, finished higher.

After the close of European trade, the EURO STOXX 50 rose 0.04%, France's CAC 40 rose 0.19%, while Germany's DAX 30 rose 0.21%. Meanwhile, in the U.K. the FTSE 100 finished up 0.41%.