Stocks Rise, Dollar Keeps Falling

Stocks climbed and the dollar continued its decline as investors grew more optimistic about a global economic recovery.

U.S. factory activity is picking up -- a trend likely to continue if the dollar remains in the doldrums, making U.S. exports more competitive abroad. A weak dollar also tends to support the prices of raw materials traded globally in dollar terms.

Market Data Center >

• Most Actives | Gainers | Losers
• New Highs and Lows | Money Flows
• Intraday Futures | Currencies

The Dow Jones Industrial Average recently rose 64 points, or 0.7%, to 9561, with Boeing contributing the most to the measure's point gain. The jet maker recently traded up 2.6%. McDonald's posted the biggest decline among blue chips, falling 1.5% after its August same-store sales in the U.S. and Asia missed analyst forecasts.

Investors are awaiting the latest Federal Reserve beige book of regional indicators, due at 2 p.m. Eastern. The Fed has said it is likely to keep interest rates low for some time as the economy heals, and that has pressured the U.S. currency as signs emerge that other economies may be returning to health more quickly.

The dollar slipped against all six foreign denominations in the U.S. Dollar Index, including the euro, Japanese yen and British pound. The index, which fell 1% on Tuesday, was recently down 0.5%.

Oil prices rose $1.32 to $72.42 a barrel. The prices of meat, lumber, and natural gas also rose, helping the Dow Jones-UBS Commodity Index to post a 0.6% gain in recent action. Gold rose $1.60 to trade at $1,001 an ounce in New York.

Wednesday's action continued the cautiously upbeat tone that has marked post-Labor Day trading. Investors caution, however, that it could take more time to establish a clear trend they would look to continue into the end of the year.

"I'm getting a little more comfortable with this market from a fundamental standpoint," though it also remains prone to short-term swings based on chart-based trading, said portfolio manager Uri Landesman, of ING Investment Management in New York.

The technology-oriented Nasdaq Composite Index was up 1.2%, the strongest performance of the major indexes. The S&P 500 rose 0.8%, led by its industrial sector, up 1.8%. Aerospace company Textron gained 2.6% after reiterating its 2009 earnings outlook.

"The resilience we've seen from the market is very surprising at a time when we don't have a lot of catalysts," said Richard Sparks, senior options trader at Schaeffer's Investment Research in Cincinnati. "Everyone isn't going all in, but we are seeing it being steadily ratcheted up."

Treasury prices slipped. The 10-year note was down 8/32 to yield 3.51%.