Monday, January 4, 2010

MarketWrap for 1/4/10--Stocks start new decade on positive note...

Stocks and commodities rallied and the dollar slumped on the first trading day of 2010 amid signs that manufacturing is improving around the world. Oil climbed above $81 a barrel after freezing weather hit the U.S.  The Dow Jones Industrial Average closed up 155.91 points, or 1.5%, to 10,583.96, posting its biggest gains in point and percentage terms since Nov. 9.  The technology-heavy Nasdaq Composite  gained 1.7%. The Standard & Poor's 500 index  climbed 1.6%, with all its sectors posting gains.   Its materials and energy categories led the gains, up 2.8% each as gold futures rose to a two-week high and crude-oil futures climbed above $81 a barrel while the dollar sank.  Investors were encouraged after the Institute for Supply Management showed a bigger-than-expected uptick in manufacturing activity during December, helped by improving production and ordering activity.   Factory employment also showed gradual improvement.   Also comforting some were Federal Reserve officials' comments from the weekend that played down the idea of lifting its easy-money policy in early 2010.  Nevertheless, Chairman Ben Bernanke said the Fed needs to "remain open" to raising rates to avert or pop future asset bubbles.  Trading activity picked up from the anemic pace of the last few months of 2009, hitting a two-week high, though it remained below last year's daily average. Most traders and money managers believe it will take a few more days for Wall Street's trading desks to return to full strength and that the gradual return of participants will tend to boost the market in the near future.

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