Wall St up on Chinese and U.S. data, Yellen comments

By Rodrigo Campos

NEW YORK (Reuters) - U.S. stocks rose for a third straight session on Wednesday after data showed China's economic growth exceeded expectations and U.S. industrial production rose for a second straight month.

Federal Reserve chair Janet Yellen, speaking in New York, provided further support, re-affirming the Fed's commitment to keep interest rates low, even after ending its bond buying program, as long as inflation remains under target and unemployment elevated.

"The larger the shortfall of employment or inflation from their respective objectives, and the slower the projected progress toward those objectives, the longer the current target range for the federal funds rate is likely to be maintained," Yellen told the Economic Club of New York.

Earlier China reported that its economy grew at its slowest pace in 18 months at the start of 2014, but the rise was better than expected and showed some improvement in March.

The global economy should grow steadily at best over the coming year, a Reuters poll showed, but any rapid slowdown in China could upset the progress.

The market's move higher "is mainly due to less concern about whether the Chinese economy is going to decelerate," said Brian Jacobsen, chief portfolio strategist at Wells Fargo Funds Management in Menomonee Falls, Wisconsin.

Further supporting stocks, U.S. manufacturing output rose for a second straight month in March in a sign of recovery from a harsh and prolonged winter that had put a damper on activity.

"The data showed the recent slowdown was purely weather related and not a symptom of underlying weakness," Jacobsen said.

The Dow Jones industrial average rose 102.05 points or 0.63 percent, to 16,364.61, the S&P 500 gained 10.3 points or 0.56 percent, to 1,853.28 and the Nasdaq Composite added 25.542 points or 0.63 percent, to 4,059.703.

Indexes climbed through most of the morning and hit session highs shortly after Federal Reserve Chair Janet Yellen largely restated the U.S. central bank's stance, stressing that it would respond to shifting economic conditions as it judges when to finally tighten monetary policy after years of unprecedented stimulus.

"The Fed is going to continue to be very accommodative, not just for the next year but for the next two to three years," said Wells Fargo Funds' Jacobsen.

BOUNCE BACK

The market has bounced back from last week's pummeling, which saw the S&P 500 post its largest weekly decline since mid-2012. Earnings this week, including those of Citigroup and Coca Cola, as well as a rebound in biotechnology stocks have supported the market.

Yahoo was the leading percentage gainer on the S&P 500 as revenue growth accelerated in the last quarter of 2013 for Alibaba, in which Yahoo holds a 24 percent stake. Yahoo shares jumped 5.7 percent to $36.15.

Intel shares briefly hit their highest since June 2012 a day after the chipmaker posted a quarterly net profit that exceeded Wall Street's estimates. Shares were last up less than 0.1 percent on the day at $26.78.

Bank of America slid 2.7 percent to $15.95 after the No. 2 U.S. bank posted a quarterly loss.

(Editing by Clive McKeef)