June 18 - Summary: Stocks rallied for a fourth day, with the S&P 500 closing at a record after Fed Chair Janet Yellen said equities were not overvalued; Chrysler joins in on recalls; Amazon enters smartphone market. Conway G. Gittens reports.
The S&P 500 jumps to a fresh record close after Federal Reserve Chair Janet Yellen says the market is not overvalued. The Dow, the S&P 500, and the Nasdaq each rallying four straight sessions. After a two-day meeting, the Fed clarified it is far from raising interest rates after continuing to wind down monthly bond purchases by $10 billion. But it was her comments on financial market stability that caught the market's attention, says LPL Financial's John Canally. SOUNDBITE: JOHN CANALLY, ECONOMIC STRATEGIST, LPL FINANCIAL (ENGLISH) SAYING: "I believe Yellen was asked about the Fed's view on stock market valuations and luckily she didn't go the Greenspan route of irrational exuberance but she said they are within fairly normal range, with which we will agree. So it is interesting and a good sign that they are focuses on that - now - before the horse is out of the barn, whereas in the 2000's we didn't really do that." Yields on the ten-year note moved lower. U.S. safety regulators are investigating Chrysler's cars for faulty ignition switches. The issue is similar to recalls by General Motors, linked to the deaths of at least 13 people. About 1.25 million vehicles covering five Chrysler models are in question. And speaking of, the company's CEO Mary Barra was back in the hot seat on Capitol Hill, answering harsh questions about why the No. 1 U.S. automaker waited more than a decade to recall millions of vehicles with the defect. On top of that, the company got hit with a $10 billion lawsuit demanding GM compensates millions of car and truck owners for lost resale value because recalls - and delays in recalls - of cars with defective ignition switches damaged its brand. In company action: Amazon took the wraps off a long speculated smartphone. It's smaller than the popular Samsung Galaxy but comes with unlimited cloud storage. Investors seemed mildly impressed, pushing the stock higher on the day. Quarterly profits coming in better than expected at FedEx as online shopping boosts demand for the company's ground shipping business. Shares of FedEx surged to an all-time high. Adobe Systems, another mover to the upside, after reporting better-than-anticipated quarterly profit and revenue. But ConAgra Foods session loser after saying its adjusted fourth-quarter profit would be lower than expected. And looking across the pond... Sources say, General Electric is getting ready to show the French government and unions a new, upgraded offer for the energy arm of Alstom on Thursday. Alstom's board has until Monday to choose between GE's $16.8 billion cash offer and a competing proposal by Germany's Siemens and Japan's Mitsubishi Heavy Industries. European stocks held steady, hovering near multi-year highs reached last week and propped by big energy companies as violence in Iraq pushed up oil prices.