Stocks edge higher as dollar continues to weaken

The stock market resumed its climb as a weaker dollar lifted gold and oil prices and Federal Reserve officials signaled that borrowing rates would remain low.

The moves in the dollar again tugged at stocks, a pattern that has become familiar in recent months. The market bounded higher in early trading but came off its highest levels by late morning.

The Dow Jones industrial average rose about 30 points after being up as much as 95 points and hitting another 13-month high. A higher finish on Wednesday would be the sixth straight gain for the Dow.

Gold and oil rose as the dollar slipped at times following predictions from Fed officials late Tuesday that the economic recovery is likely to be weak. Investors took that as another sign that policymakers will hold interest rates low to help resuscitate growth.

Record-low interest rates and the resulting slide in the dollar have been major forces behind the surge in stocks since the summer. The borrowing costs of near zero are a boon for financial companies, and the weakening dollar helps make U.S. exports cheaper to overseas buyers.

Upbeat news about corporate earnings and global economies also boosted stocks.

Home builders rose after Toll Brothers Inc. said late Tuesday that it saw a 42 percent jump in signed contracts for new homes in its latest quarter.

The French bank Credit Agricole SA posted earnings that topped expectations, while employment rose in Britain for the first time since May 2008.

Analysts said the direction of the dollar likely will continue to dictate trading.

“I don’t see anything that’s changing out there that’s going to stop out dollar from getting weaker,” said Ralph Fogel, co-chief investment officer at Fogel Neale Partners in New York.

In early afternoon trading, the Dow rose 32.12, or 0.3 percent, to 10,279.09. The Dow rose as high as 10,341.97, its best level since Oct. 3, 2008.

The Dow’s advance was significant for traders who track stock charts. The index briefly topped 10,334, the level that marked the halfway point in its recovery since tumbling to a 12-year low of 6,574 on March 9.

The broader Standard & Poor’s 500 index rose 4.30, or 0.4 percent, to 1,097.31. It rose to a 13-month high of 1,105.37 ? also its best level since Oct. 3 last year.

The Nasdaq composite index rose 11.32, or 0.5 percent, to 2,162.40.

The Russell 2000 index of smaller companies rose 4.06, or 0.7 percent, to 590.99.

The bond market is closed for Veterans Day.

Crude oil rose 11 cents to $79.16 per barrel on the New York Mercantile Exchange.

Toll Brothers jumped $2.74, or 14.9 percent, to $21.13 after its report. That lifted other home builders. Pulte Homes Inc. rose 61 cents, or 6.5 percent, to $10.07, while Beazer Homes USA Inc. advanced 44 cents, or 8.6 percent, to $5.54.

Three stocks rose for every two that fell on the New York Stock Exchange, where volume came to 537.7 million shares compared with 523.7 million shares traded at the same point Tuesday.

Overseas, Japan’s Nikkei stock average rose 0.1 percent. Britain’s FTSE 100 rose 0.7 percent, Germany’s DAX index rose 1 percent, and France’s CAC-40 added 0.8 percent.

Copyright 2009 The Associated Press.