Major stock indicators rose more than 1 percent Tuesday, including the Dow Jones industrial average, which traded above 10,500 for the first time since October of last year.
NEW YORK (AP) — The stock market is picking up where it left off before its scare over debt problems in Dubai.
Major stock indicators rose more than 1 percent Tuesday, including the Dow Jones industrial average, which jumped 126 points and traded above 10,500 for the first time since October of last year.
The weakening dollar again boosted stocks, a pattern that has played out for months. The cheaper U.S. currency drove up commodities prices and lifted the stocks of energy and materials companies that produce them.
Analysts said a mostly upbeat array of economic reports and easing worries about the fallout from debt struggles in Dubai gave investors who had jumped out of the market last week reason to return.
The market’s two-day advance leaves the Dow where it was before tumbling Friday on worries that an investment fund in Dubai wouldn’t be able to pay its debts and might trigger another financial spiral like the one that followed the collapse of Lehman Brothers last year.
Rick Bensignor, chief market strategist at Execution LLC, said the drop in the dollar and a move into riskier assets like stocks is a sign that investors who moved into defensive positions are no longer worried about a spread of debt problems beyond the Middle East.
“The market has essentially shaken it off,” he said. “The whole move is as if nothing happened last week.”
Economic reports were mixed, but still pointed to a strengthening trend. The Institute for Supply Management, a trade group, said overall manufacturing activity grew at a slower pace in November but that new orders rose. That signals activity could pick up in the coming months. The ISM’s measure of employment grew for the second straight month after sliding for more than a year.
The snapshot of U.S. factories followed a report from a Chinese industry group that said manufacturing activity grew in November for the ninth consecutive month.
Meanwhile, the National Association of Realtors said its reading on pending home sales rose in October to the strongest level since March 2006. Economists had expected pending sales to fall.
The Commerce Department said construction spending edged higher in October, the first increase in six months.
The reports gave investors more confidence that a nearly nine-month rally in the stock market still has legs thanks to continued signs of expansion in the economy. The Dow jumped 6.5 percent in November, its best monthly gain since July, and it’s up 60 percent from a 12-year low of 6,547.05 in March.
According to preliminary calculations, the Dow rose 126.74, or 1.2 percent, to 10,471.58, its highest close since October last year.
The broader Standard & Poor’s 500 index gained 13.23, or 1.2 percent, to 1,108.86, while the Nasdaq composite index rose 31.21, or 1.5 percent, to 2,175.81.
The ICE Futures U.S. dollar index, which measures the greenback against a basket of foreign currencies, fell 0.5 percent.