Stocks gain momentum, led by utilities, health care; Industrials fall as dollar rebounds
By Sara Lepro, APFriday, October 9, 2009
Stocks edge higher, adding to the week’s big gains
NEW YORK — Gains in health care, utilities and financial shares kept the stock market’s momentum going Friday.
Major stock indexes rose less than 0.5 percent in midday trading, on track for their best week since July. Going in to Friday, the Dow Jones industrial average is up 300 points, or 3.2 percent, for the week. The Standard & Poor’s 500 index is up 3.9 percent.
Investors have cheered more signs this week that the economy is healing, including growth in the service sector, a surprise profit from aluminum maker Alcoa Inc. and the first gain in retail sales in over a year.
Moderating the market’s advance Friday was a rebound in the dollar, which weighed on commodities and industrial stocks. The greenback recovered some of its recent losses against other currencies after Federal Reserve Chairman Ben Bernanke reassured markets that the U.S. central bank will be able to wind down its extraordinary stimulus measures when the time is right.
Some investors interpreted Bernanke’s comments as a sign that the Fed might raise interest rates sooner than expected, which would boost the dollar versus other currencies.
Record low interest rates in the U.S. and massive government spending have weakened the dollar this year, sending one widely used index of the dollar’s value down nearly 15 percent against other currencies since early March, when the stock market’s rally began.
The decline in the dollar has been a boon to both stocks and commodities this year. A weak dollar makes commodities more attractive to foreign investors. Likewise, it helps boost corporate profits at companies that have a strong presence in overseas markets. But at the same time, a rapidly falling dollar is worrisome because it could lead to inflation.
The Dow rose 27.13, or 0.3 percent, to 9,814.00. The Standard & Poor’s 500 index added 0.49, or 0.1 percent, to 1,065.97, while the Nasdaq composite index rose 7.02, or 0.3 percent, to 2,130.95.
