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Stocks soar but skeptics abound

Monday, March 17, 2014 - 02:03

Mar 17 - Summary: Stocks rally one percent after Crimea vote but lack of volume suggests volatility ahead; GM widens recall to newer models; Industrial production bounce stronger than hoped; Homebuilder moods stable. Conway G. Gittens reports.

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A serious bounce back on Wall Street as this weekend's vote in Crimea was largely as expected - without sparking new violence. The result, however, did set off U.S. and European sanctions against Russian officials, but that was expected too. The Dow and S&P 500 rallied about one percent, with the Nasdaq up less. Kristina Hooper of Allianz Global Investors says the sell-off last week, not Monday's rebound, sends the clearer message. SOUNDBITE: KRISTINA HOOPER, U.S. INVESTMENT STRATEGIST, ALLIANZ GLOBAL INVESTORS (ENGLISH) SAYING: "We lack still the commitment on the part of U.S. investors to the stock market. Five years into this bull market, we are still seeing movement out of stocks at any sign of trouble -whether it's geopolitical, whether it's economic - and so we are likely to see a repeat of this as the situation moves forward." General Motors is basically doubling an auto recall. This latest announcement affects 1.5 million newer luxury sedans, crossover utility vehicles and full-size vans, on top of the 1.6 million older models already under recall. Here's GM CEO Mary Barra in a video to employees: SOUNDBITE: MARY BARRA, CEO, GENERAL MOTORS (ENGLISH) SAYING: "These are serious developments that shouldn't surprise anyone. After all, something went wrong with our processes in this instance and terrible things happened. As a member of the GM family and as a mom with a family of my own, this really hits home for me. We have apologized but that is just one step in the journey to resolve this." Most notably, GM is ramping up production of products to replace those impacted by the recalls. And will take a $300 million charge to cover costs. Shares of GM - up for the day but still down more than five percent since the first recall was announced late last month. A quick look at the economy: industrial output expanded last month at a much faster than expected rate; Meanwhile, home builder sentiment was basically flat in March due to concerns about tight labor conditions and higher materials costs. Looking to Europe now: there was a relief rally across the region following the Crimea vote.