Investors halted a three-day losing streak on Monday as prices rallied higher on a weaker dollar and better-than-expected home sales numbers. Major US stock indices jumped more than 1 percent, led by the Dow Jones industrials, which rose 133 points to a 13-month high. The Standard & Poor’s 500 Index rallied over 1.4 percent to close at 1,106.24. All 10 industry groups in the S&P 500 advanced, led by technology and financial companies. Copper, a barometer for economic activity rallied to a 14-month high and gold reached a record as the Dollar Index fell for the first time in three days. Meanwhile, bond prices retreated as investors regained their appetite for risk.
Investors found plenty reasons to buy as the day's developments pointed to two trends: an improving economy and interest rates that are expected to stay low. Sales of existing U.S. homes increased 10 percent in October to the highest level since February 2007, National Association of Realtors data showed today. Investors were buying Monday on somewhat contradictory forces in the market. The strength in housing is a sign of an improving economy, which could argue in favor of raising rates, while the dollar's weakness points to rates remaining low. Analysts say investors who still have plenty of available cash are primed to buy, and so the market may also be rising on its own momentum.
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