Stocks Pare Gains as Gold Loses Steam

Stock prices steadied at modestly higher levels as Wall Street staked a rally on rising prices of gold and oil.

Weakness in the U.S. dollar helped propel commodities broadly even though gold edged below $1,000 an ounce. Crude oil reclaimed the $70 a barrel mark.

The dollar hit its lowest level in nearly a year against a basket of currencies, a move that may have been sparked over concerns that the greenback's status as the world's reserve currency was in danger.

Gold miners were getting a boost from the metal's run, with Barrick Gold and Couer D'Alene setting the pace.

Anticipation of deal-making helped propel the market as well.

The Dow Jones US Iron and Steel Index gained about 3 percent in morning trading while the Platinum and Precious Metals Index soared nearly 11 percent.

Cadburyresisted Kraft's $16.7 billion bid, and reports say Hershey may become a player to prevent Kraft or another competitor from acquiring Cadbury.

General Electric also helped boost the market. The parent company of saw its shares gain after JPMorgan upgraded the stock to overweight from neutral and raised the price target to $17 from $12.

But shares of American International Group slipped after Credit Suisse cut AIG to underperform, citing "little to no value for common equity."

GE led gainers on the Dow industrials while Kraft was the index's worst performer.

September — historically the worst month for stocks — had started off in traditional fashion with losses on the first two trading days, but the averages gained in the final two sessions before the long weekend and are poised to do so again today.

The economic calendar is a relatively light one, although the government will be out with consumer credit figures for July at 3 pm New York time. Economists think credit will have dropped by $3.5 billion during the month.

The first of three Treasury note and bond auctions also will take place, with $38 billion in 3-year notes set to be sold today. Results will be available shortly after 1 pm New York time.

The Treasury will auction $20 billion in 10-year notes tomorrow and $12 billion in 30-year bonds on Thursday.

Though the indexes posted comparatively mild gains market breadth was strongly positive, with gainers beating losers about 2.5 to 1 on the New York Stock Exchange. There were 133 new highs against just one new low with market volume about 570 million shares by 12:30 pm ET.