Dow Jumps as Microsoft, Disney Score Blockbusters; Dovish Yellen Boosts Financials

Earlier this month, Federal Reserve Chairwoman Janet Yellen sent the Dow Jones Industrials into a mild tailspin after suggesting the central bank could take away rock-bottom short-term interest rates as soon as the middle of 2015. Yet this morning, Yellen nudged expectations back toward a longer time frame for low rates, and that helped send the Dow up 119 points as of 11 a.m. EDT. Although the news helped financial stocks JPMorgan Chase and Visa climb, Microsoft and Disney saw even stronger jumps after news that two of their respective offerings had performed impressively over the weekend.

Source: Microsoft.

For Microsoft, which gained more than 2%, the positive results came from its Office for iPad apps, with Word, Excel, and PowerPoint quickly claiming the top spots among free downloads. Of course, the huge question here is whether those who download the free app will take the next step toward actually subscribing to Microsoft's ongoing service, which allows users to go beyond simply reading existing Office files and actually create or edit them. The success of Microsoft's cloud strategy relies on the tech giant collecting enough recurring subscription-based revenue to offset the loss of outright license sales. Given some of the logistical difficulties of taking advantage of the full functionality of Office on devices with relatively small screens, it's far from a certainty that Microsoft will be able to turn Office for iPad into a huge moneymaker.

Disney gained 1.3% as the entertainment giant said that studio hit Frozen had climbed above the $1 billion mark to become its top-grossing animated film ever. Although the movie has only just cracked the top 10 in terms of all releases, Frozen has been a breath of fresh air for those who worried that an overreliance on franchises like Marvel's Iron Man and various Pixar offerings wouldn't be enough to sustain long-term success for Disney. Now, though, Disney's expertise at squeezing the most profit from successful movies can get into high gear via merchandising efforts that could take the company's stock back toward all-time highs.

More generally, Yellen's positive comments reassured investors that any increases in interest rates would be measured and pre-planned. That helped push shares of JPMorgan and Visa up near 1.5%, with JPMorgan standing to benefit from potentially greater levels of mortgage activity and other consumer lending. Meanwhile, Visa hopes to turn stronger consumer spending into greater card-purchase activity, bolstering its own bottom line. Even though Visa bears no direct exposure to higher interest rates because of its lack of credit exposure, the card-network giant still does better when its cardholders feel flush and willing to spend. Yellen's comments should do their part toward driving the economy higher in the next year or two, and that's good news for stocks.