Stocks rallied for a second day Tuesday as news that Australia has raised rates revitalized hope for the global recovery.
The Dow Jones Industrial Average jumped 1.4 percent, adding to its 1.2-percent gain from Monday. The S&P 500 added 1.4 percent and the Nasdaq advanced 1.7 percent.
All 30 Dow stocks finished higher, led by Alcoa , Intel and JPMorgan .
The big news in the market today was that Australia raised its key interest rate, becoming the first major economy to do so since the financial crisis began.
Gold settled at a record near $1,039 an ounce after hitting an intraday record high above $1,045. Oil settled above $70and the dollar retreated.
Dow energy components ExxonMobil and Chevron gained 1.6 percent and 1.7 percent, respectively.
One popular topic of conversation in the oil pits today was a report that oil producing nations are in talks to replace the U.S. dollar with a basket of currencies for trading oil.
Boeing finished at the bottom of the Dow pack after the aerospace giant said it will take a charge of $1 billion in the third quarter because of higher production costs and tough market conditions for its 747-8 program. And, it will delay the first flight of the jumbo 747-8 Freighter to 2010.
Banks were the leader in Europe after Bank of America-Merrill Lynch upgraded European banks to "overweight." This comes on the heels of Goldman Sachs' upgrade of the large-cap banking sector in the U.S. on Monday.
In the U.S., gains were more modest: JPMorgan was up 2.5 percent, while Bank of America gained just 0.2 percent.
Microsoft gained 1.9 percent after the software giant released new mobile-phone software to take on Apple and its iPhone.
Intel and other chip stocks rallied after research firm Gartner said it expects global semiconductor revenue could grow about 10 percent next year, after a two-year slide, amid increased demand for computers and smartphones.
All this, of course, could be either waylaid or boosted by earnings season, which officially kicks off tomorrow afternoon when Dow component Alcoa reports quarterly results.
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There are no major economic reports on the calendar today, and very few notable earnings reports. After the bell, investors will get quarterly numbers from Yum Brands, the parent of the KFC, Taco Bell, and Pizza Hut chains.
The Treasury auction of 3-year notes was met with decent demand. The Treasury sold $39 billion of 3-year notes, with a bid-to-cover ratio of 2.76.
NutriSystem shares rallied 16 percent after the company announced that it will sell its 14-day Starter program at Wal-Mart, the first time the company has sold its products in the retail channel.
Wal-Mart rival Target gained 2.5 percent after the company announced that it will match Wal-Mart's price cuts on toys for the holiday season.
Volume was light, with 1.23 billion shares changing hands on the New York Stock Exchange. Advancers outpaced decliners, roughly 4 to 1.
Still to Come:
TUESDAY: IMF meeting; Fed's Fisher, Hoenig speak; Earnings from Yum Brands
WEDNESDAY: Weekly mortgage applications; weekly crude inventories; consumer credit; Earnings from Costco, Family Dollar, Alcoa
THURSDAY: Chain-store sales; foreclosure report; BOE, ECB rate decisions; weekly jobless claims; wholesale trade; Fed's Hoenig speaks; Earnings from Pepsi, Marriott, Chevron (interim)
FRIDAY: Market peak 2-year anniversary (Dow at 14,164.53); international trade
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