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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With the Feds out of contol Quant debacle ,The fundamentals are in place for AU1700 an ounce.....Silver will be the real Bull in the next few years with the rate of current global depletion. Grab some Eagles right about now,the most prudent move you can make!

January 12 2011 at 5:13 PM Report abuse +1 rate up rate down Reply
2 replies to martinsportraits's comment

you must be long silver.

January 12 2011 at 5:41 PM Report abuse rate up rate down Reply

There has been no startling increase in overall money supply (take a look at M3, for example); the Fed has been more or less simply trying to keep up with the money destroyed beginning in 2008. When things get moving, of course, some of this will need mopping up, but for now, the Fed's policy appears rationally plausible.

January 13 2011 at 8:48 AM Report abuse rate up rate down Reply
Robert & Lisa

Evil, ultra rich man George Soros is sitting on billions in precious metals in his vaults. He's betting against the dollar. Do you think he gave all that money to get Obama and the corrupt Demons elected two years ago for nothing?

January 12 2011 at 4:53 PM Report abuse +5 rate up rate down Reply
1 reply to Robert & Lisa's comment

who in the hell is george soros? just a guy, not a master of the universe. lot's of guys out there. you should be more concerned about the ones you have never heard of who might be masters of the universe. actually, there are no masters of the universe. it's too big now for one guy to control or run.

January 12 2011 at 5:41 PM Report abuse -2 rate up rate down Reply