Stocks advanced Tuesday as the two-year Treasury auction was met with strong demand and the dollar retreated.
The Dow is just a few points short of a record point gain for any one quarter—the current record is 1,339 points set in the fourth quarter of 1998. The Dow is up 1,332 points for the quarter right now with seven trading sessions remaining, and is within 200 points of the 10,000 mark.
The Treasury auctioned $43 billion of two-year notes at a high-yield of 1.034 percent. Demand was strong, with a bid-to-cover ratio of 3.23.
The dollar hit a fresh one-year low against the euro, which in turn boosted commodity prices and again boosted the prospects for the stock market.
Crude oil gained more than $1, topping $71 a barrel.
Bank of America was among the biggest Dow gainers after Rochdale analyst Dick Bove raised his price targeton the stock to $25 from $19, citing his confidence in the strength of the bank's position.Citigroup
shares rose after GIC reduced its stake in the company to less than 5 percent.
Alcoa benefitted from the dollar's retreat and from a price-target increase from Goldman Sachs, which cited increasing aluminum prices for its decision.
U.S. Steel also got a boost from higher metal prices and an analyst upgrade: Bank of America-Merrill Lynch raised its rating to "neutral" from "underperform," saying improving utilization should return the company to profitability next year.
Two energy companies — Peabody Energy and Massey Energy — were upgraded to "buy" by Citigroup, which said the manufacturing recovery should start to boost coal demand.
Pfizer advanced after a trial showed switching breast-cancer patient's to the firm's Aromasin half-way through a five-year course of tamoxifen helped improve the patients' chances of staying cancer-free for at least the next six years.
Lowe's skidded after the home-improvement chain affirmed its full-year profit view—its fiscal year ends Jan. 29—but warned of charges ahead due to slow sales at stores hit by the economy.
Elsewhere in retail, Macy's shares advanced after Citigroup upgraded its rating on the stock to "buy."
Cadbury shares ticked higher after the chocolatier's CEO admitted to the Wall Street Journal that a deal with Kraft Foods would have some "complementary elements."
And ConAgra Foods skidded after the company beat analysts' estimates and raised its earnings forecast for the full year as commodity costs eased and price increases helped lift sales.
The Federal Reserve kicks off a two-day policy meeting today, with an announcement expected at 2:15pm ET tomorrow.
And the Treasury kicks off $112 billion in debt sales today with an auction of $43 billion dollars in two-year notes, with the results available shortly after 1 pm. The five-year auction is Wednesday and seven-year is Thursday.
The monthly U.S. Home Price Index for July is out at 10 am, with economists looking for an increase of 0.5 percent over the prior month.
Political matters will also capture investor attention today, as the Senate Finance Committee begins marking up the health care reform bill, and as world leaders convene in New York for the U.N. General Assembly.
TUESDAY: Two-day Fed meeting begins
WEDNESDAY: Weekly mortgage applications; weekly crude inventories
THURSDAY: G-20 summit begins; weekly jobless claims; existing-home sales; seven-year auction; Earnings from RIM
FRIDAY: Durable-goods orders; consumer sentiment; new-home sales; Earnings from KB Home
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