There's No Business Like FOX Business
The bears were in full retreat Monday as a fresh 15-month low for the U.S. dollar fueled a buying binge in stocks and commodities and pushed the Dow to unseen territory for 2009.
Today's Markets
The Dow Jones Industrial Average rose 203.52 points, or 2.03%, to 10226.94, the S&P 500 gained 23.78 points, or 2.22%, to 1093.08 and the Nasdaq Composite added 41.62 points, or 1.97%, to 2154.06. The consumer-friendly FOX 50 picked up 16.08 points, or 2.05%, to 800.69.
The bullish start to the week landed the S&P 500 in the green for the sixth day in a row and the blue-chip index more than 500 points higher in the past week alone, fully recapturing the losses from last month's mini correction. At the same time, crude touched $80 a barrel and gold closed at yet another all-time high above $1100 an ounce.
“It’s been a monetary trade around the world that’s keeping stock prices going," Paul Nolte, managing director at Dearborn Partners, told FOXBusiness.com.
The latest dive for the greenback was fueled by new pledges from finance ministers at the G20 summit to keep stimulus efforts in place until the global economy recovers.
“They are basically saying: ‘We are going to continue to print money,’" said Art Hogan, chief market strategist at Jefferies & Co.
Enjoying its second 200-point surge in three sessions, the Dow was guided higher by financial stocks American Express (AXP: 39.01, 1.78, 4.78%) and Bank of America (BAC: 15.75, 0.71, 4.72%). The index's only decliner was Kraft (KFT: 26.53, -0.27, -1.01%), which formally made a hostile takeover bid for British candy giant Cadbury (CBY: 50.7, 0.2, 0.4%).
Now up 56% since plummeting to 6547 in March, the Dow has picked up 455 points in the last four days -- its best four-day performance since late July. The S&P 500 and Nasdaq have enjoyed even stronger gains, surging 61.6% and 69.8% respectively since hitting their bear-market lows. But with so much of the recent gains tied to the currency markets, some analysts are preaching caution.
“This monetary trade can continue for a while but we think ultimately when the music stops we could see a market that could come down 10% to 15% from where we are now," said Nolte.
Monday's gains were fueled by the dollar, which plunged 0.94% against the euro in the wake of the G20 summit. The currency has come under renewed pressure in recent days amid the latest signals that easy-money policies aren't going anywhere despite economic growth. While a long-term worry for officials, a weaker greenback has proven to be a short-term bullish catalyst for the markets by boosting demand for commodities and making U.S. goods cheaper overseas.
