Stocks climb again as commodity prices surge; Dow rises 70 points

The stock market returned to rally mode Wednesday as a surge in gold and other commodity prices gave investors a reason to snap up shares of energy and raw-material suppliers.

The Dow Jones industrial average rose 70 points, or 0.8%, and the other major stock indexes climbed 1.2%.

The closing levels, however, masked a volatile session. Shares initially rose on expectations of a bailout for General Motors and Chrysler, but the market forfeited that advance on signs that the plan was running into opposition from Republican lawmakers.

But a growing rally in commodities pushed stocks back into positive territory.

Gold futures shot up $34.70 an ounce to $807.10 on the New York Mercantile Exchange, lifted by a weaker dollar but also because investors seemed to be more willing to take on some risk -- a trend that has also been apparent in the recent rally on Wall Street. Oil futures advanced $1.45 to $43.52.

In turn, companies that make their money from commodities rose, boosting the rest of the stock market.

Oil giant Exxon Mobil gained 2.4%, while mining company Freeport-McMoRan Copper & Gold soared 16%.

Energy stocks in the S&P; 500 climbed 4.7% as a group, while raw-material stocks were up 2.7%.

The rise in commodities suggested that some investors were betting on an economic rebound, said Richard E. Cripps, chief market strategist for Stifel Nicolaus.

“At this point in time, commodities going up are a welcome sign,” he said.

The Dow rose 70.09 points to 8,761.42. The S&P; 500 index rose 10.57 points to 899.24, and the Nasdaq composite index rose 18.14 points to 1,565.48. The Russell 2,000 index of smaller companies jumped 2.3%.

The number of stocks advancing on the New York Stock Exchange Wednesday outpaced those declining by more than 2 to 1.

The Dow and the S&P; 500 have risen in 10 of the last 13 sessions.

Since reaching multiyear lows Nov. 20, the Dow is up 16%, the S&P; 500 has climbed 19.5%, and the Nasdaq is up 19%.

“I think what you have now is people are looking among the carnage and saying, ‘Wait a minute, maybe the baby was thrown out with the bathwater’ ” during the devastating selling of October and November, said John Merrill, chief investment officer at Tanglewood Wealth Management.

In the Treasury market, the annualized yield on the four-week T-bill rose to 0.05% a day after being auctioned at a yield of zero.

The dollar was lower against most other major currencies, which helped feed the rally in commodities.

Shares of GM were up in the first hours of trading but slumped as doubts about a bailout grew. The stock closed at $4.60, down 10 cents. Ford Motor rose 2 cents to $3.25. Chrysler’s shares aren’t publicly traded.

Overseas, key stock indexes rose 3.1% in Japan, 5.6% in Hong Kong, 0.5% in Germany and 0.7% in France. Shares fell 0.3% in Britain.