Stocks higher as investors build on momentum

NEW YORK (AP) — Investors held on to their optimism about an economic recovery, extending the stock market’s latest rally.

The moderate advance Monday followed big gains in overseas markets. Oil and other commodities rose, while Treasury prices were mixed ahead of the government’s latest round of auctions. The biggest gainers in stocks were financial, energy and material companies — all industries that depend heavily on a healthy economy for growth.

Investors were encouraged by Federal Reserve Chairman Ben Bernanke’s declaration Friday that the economy is on the verge of recovery. Though there are no major economic reports scheduled for Monday, but traders’ upbeat mood could be tested by reports on consumer confidence and housing.

There have already been signs of recovery in the housing market. But consumers are still struggling, and that is problematic for the economy, as Amercans’ spending accounts for more than two-thirds of all economic activity.

Analysts warn that a disappointing report on consumers could easily upset the market’s recent gains. The Standard & Poor’s 500 index is up 52 percent since early March.

On Tuesday, the Conference Board releases its monthly consumer confidence index. Reuters and the University of Michigan report their final consumer sentiment figures for August on Friday.

The Dow Jones industrial average rose 63.03, or 0.7 percent, to 9,568.99. The Standard & Poor’s 500 index rose 7.91, or 0.8 percent, to 1,034.04, while the Nasdaq composite index rose 14.61, or 0.7 percent, to 2,035.51.

On Friday, the Dow shot up 155 points, closing above 9,500 for the first time since Nov. 4, and all the big indexes finished with gains of more than 1.5 percent to close at their highest levels of the year.

More than three stocks rose for every one that fell on the New York Stock Exchange where volume came to a light 215.3 million shares.

In other trading, the Russell 2000 index of smaller companies rose 3.83, or 0.7 percent, to 585.34.

Bond prices were mixed Monday as investors prepared for a round of auctions this week totaling $197 billion. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.58 percent from 3.57 percent late Friday. The yield on the three-month T-bill, considered one of the safest investments, fell to 0.15 percent from 0.16 percent.

Stocks got a push early on from the gains in overseas markets. Japan’s Nikkei stock average surged 3.4 percent, while China’s main index was up for a third straight day, gaining 1.1 percent. Sharp falls in the index last week triggered selling around the world.

In afternoon trading, Britain’s FTSE 100 rose 0.8 percent, Germany’s DAX index gained 0.9 percent, and France’s CAC-40 rose 0.7 percent.

The dollar mostly rose against other major currencies, while gold prices rose.

Copyright 2009 The Associated Press.