Stocks Rally on Dollar Rebound
Wall Street moved broadly higher Monday -- with tech shares enjoying their best one-day advance in nearly five months -- as a recovery in the dollar motivated investors to snap up stocks after two weeks of declines.
“With the dollar improving and a slew of economic numbers coming out later this week, I suspect the market is playing catch-up,” said Peter Cardillo, president and chief strategist of Global Partner Securities. “And traditionally the week of Thanksgiving is usually a positive week for stocks.”
The technology-laden Nasdaq composite index jumped 53.26 points, or 2.8%, to 1,947.14, its largest percentage advance since July 7. The Dow Jones industrial average closed up 119.26 points, or 1.2%, at 9,747.79 -- its best day in almost a month -- and the Standard & Poor’s 500 index rose 16.80, or 1.6%, to 1,052.08, its biggest gain since Oct. 1.
Winners led losers by almost 3 to 1 on the New York Stock Exchange and Nasdaq. Trading volume was moderate and probably will slow as the week goes on. U.S. markets are closed Thursday for Thanksgiving and will close early on Friday.
The market has fallen in recent weeks as investors grappled with fears about a weakening dollar and concerns that stock prices might be a bit high. Last week, the dollar slid to a new low against the euro and slumped versus the yen, raising worries of dampened foreign investment in the United States.
On Monday, the euro closed at $1.177 in New York trading, down from $1.192 on Friday. The dollar rose to 109.43 yen, up from 108.80 yen Friday.
Despite the market’s recent drop, analysts say investors remain largely optimistic about the economy. Reports due out later this week on consumer confidence, gross domestic product and personal income also should give investors stronger clues about the strength of the recovery, they said.
Larry Wachtel, market analyst at Wachovia Securities, characterized recent declines as a healthy consolidation after several months of gains. Now that the market has “corrected” some of its excessive gains, stocks might be poised for their traditional holiday rally, he said.
Monday’s rally was led by some of the market’s biggest names. Wal-Mart Stores, the world’s No. 1 retailer and fourth-biggest U.S. company, rose $1.27 to $56.08 after saying sales this month are rising within its forecast. GE, the No. 1 company by market value, rose 19 cents to $28.75. Microsoft, the world’s biggest software maker, climbed 62 cents to $25.73. Pfizer, the world’s largest drug maker, added 71 cents to $33.89.
The Dow’s biggest percentage gainer was Intel, up $1.14, or 3.5%, at $33.46. The biggest chip maker said it had built test chips using next-generation 65-nanometer technology and expected to be the first to produce them.
Crude oil had its biggest decline in 12 weeks on speculation supplies will rise as the Organization of the Petroleum Exporting Countries pumps more than agreed to at the group’s last meeting. Crude for January delivery ended down $1.87 a barrel, or 5.9%, at $29.74 in New York. Gold fell $4.50 an ounce to $391.50 in New York.
The yield on the 10-year Treasury note closed at 4.23%, up from 4.16% on Friday.
Among other highlights:
* Citigroup gained 40 cents to $46.74. After the market closed, the world’s biggest financial services firm said it bought Washington Mutual Finance Corp., the Tampa, Fla.-based consumer finance unit of Washington Mutual, for $1.25 billion.
* Boston Scientific climbed $1.79 to $35.70 after Johnson & Johnson lost a court bid to keep the company’s new stent off the market.
* Adobe Systems gained $2.04 to $41.40 after UBS raised the company’s stock rating to “buy” from “neutral.”
