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Stock indexes reach 13-month highs on October retail sales : The Dow jumps 136 points and the S&P 500 surpasses 1,100. Treasury yields sink on Fed chief's comments.

November 17, 2009|Associated Press

NEW YORK — Stocks rose sharply Monday, pushing all three major indexes to 13-month highs, on a bigger-than-expected rebound in retail sales last month.

The Dow Jones industrials shot up 136 points, while the Standard & Poor's 500 index closed above the 1,100 mark for the first time in more than a year.

The dollar extended its slide, helping lift gold to a record high and pumping up prices of other commodities, including oil. That, in turn, helped shares of energy and material suppliers.

Stocks also got a boost when Federal Reserve Chairman Ben S. Bernanke reaffirmed in a midday speech that the central bank would hold interest rates at record-low levels for an "extended period" and that he didn't see signs that the money being pumped into the economy by the government was creating speculative bubbles.

Treasury yields sank after Bernanke said inflation appeared contained.

The market opened higher and kept rising after the Commerce Department said retail sales rose 1.4% in October, nearly double the increase estimated on average by economists. It was a sharp rebound from a 2.3% drop in September. Excluding a big increase in auto purchases, however, sales rose just 0.2%.

The new General Motors also contributed to the upbeat mood when it said it lost $1.2 billion, less than expected, since emerging from Chapter 11.

GM also said it would begin to repay its government loans sooner than planned, starting with $1.2 billion next month.

The Dow advanced 136.49 points, or 1.3%, to 10,406.96, its highest close since October of last year.

The broader S&P 500 index rose 15.82 points, or 1.4%, to 1,109.30. It had hovered around the 1,100 mark for a month but hadn't closed above it since October 2008. The index first finished above 1,100 more than a decade ago, in March 1998.

The Nasdaq composite index rose 29.97 points, or 1.4%, to 2,197.85, its highest level since September 2008.

The Russell 2,000 index of smaller-company stocks jumped 2.8%.

About five stocks rose for every one that fell on the New York Stock Exchange.

An index of the dollar's value against six other major currencies fell 0.6% to a 15-month low.

Gold futures rose $22.50, or 2%, to a record close of $1,138.60 an ounce in New York trading. The metal's price topped $1,140 after hours.

Bernanke's remarks about inflation encouraged investors to buy Treasury bonds. The yield on the benchmark 10-year T-note fell to 3.33% from 3.42% late Friday.

Oil futures surged $2.55 to settle at $78.90 a barrel on the New York Mercantile Exchange.

Energy stocks in the S&P 500 climbed 2.4%. Among precious-metal firms, shares of Freeport-McMoRan Copper & Gold gained 3.6%.

Overseas, the Nikkei stock average rose 0.2% after Japan reported that its economy grew for a second straight quarter, marking an end to the recession there.

Key stock indexes climbed 1.6% in Britain, 2.1% in Germany and 1.5% in France.

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