U.S. Stocks Get a Lift From Portugal and the Dollar
Stocks closed broadly higher Wednesday after Portugal's government had no trouble in tapping global debt markets, helping ease European debt fears. The euro gained at the dollar's expense, which lifted a broad basket of commodities as well as U.S. equities.
The Dow Jones Industrial Average ($INDU) rose 84 points, or 0.7%, to close at 11,755, led by bank stocks JPMorgan Chase (JPM) and Bank of America (BAC). The blue-chip index tacked on as much as 110 points earlier in the session but pared its gains after the Federal Reserve released its most recent anecdotal report on the state of the economy known as the Beige Book.
The S&P 500 ($INX) gained 11 points, or 0.9%, to finish at 1,286, led by financials, energy and commodities stocks. The tech-heavy Nasdaq Composite ($COMPX) finished up 21 points, or 0.8%, at 2,737.
U.S. markets followed strong gains in Europe after Portugal successfully auctioned more than $1.6 billion in bonds due in 2014 and 2020. That helped allay anxiety over whether the cash-strapped government in Lisbon could meet its longer-term funding needs and instilled confidence in Spain's and Italy's ability to raise cash when their governments hold auctions Thursday.
The euro spiked more than 1.2% Wednesday, a large move in currency terms, pushing down the dollar. A stronger dollar has been contributing to the lackluster performance of stocks and commodities so far in 2011. "Since the beginning of the year, with the exception of the first trading day, the S&P 500 has been marking time on concerns about Portugal," Ed Yardeni, president of Yardeni Research, wrote in a report to clients.
Oil Hits Two-Year High
The US Dollar Index, which measures the greenback against a trade-weighted basked of major currencies, fell more than 1%. That helped push oil prices to a two-year high. Benchmark crude for February delivery rose 66 cents, or 0.7%, to settle at $91.77 a barrel on the Comex division of the New York Mercantile Exchange (CME).
Platinum, palladium and copper also rose sharply, while gold finished modestly higher. The yellow metal added $3, or 0.2%, to close at $1,387 an ounce on the Comex. The bond market retreated as investors sought riskier assets. The yield on the benchmark 10-year Treasury note, which moves in the opposite direction of price, rose to 3.36% from 3.34% Tuesday.
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