Stocks snapped a three-day losing streak Monday after an encouraging report on existing-home sales and a pullback in the dollar.
The Dow Jones Industrial Average rose more than 132.79, or 1.3 percent, to close at 10,450.95 — its highest level since October 2008. The S&P 500 and Nasdaq each gained 1.4 percent.
Twenty-eight of 30 Dow components finished higher, led by Verizon, AT&T and GE.
The dollar retreated against other major currencies, hitting a six-week low against the yen, after St. Louis Fed President James Bullard said the Fed should keep interest rates low for some time. He also said the Fed should continue buying mortgage backed securities and other assets longer than it currently plans.
Oil settled at $77.56 a barrelon the dollar's retreat and signs of demand from China. Gold settled at $1164.30 a troy ounceafter earlier hitting a new record at $1,173.50.
Existing-home sales shot up 10.1 percentin October to their highest level in 2 1/2 years and well above the 2.3 percent rise economists had expected. This came after a a 9.2-percent jump in September.
The "shocking" home-sales number isn't just a good sign for the housing sector — it's a good sign for banks, said Todd Schoenberger, managing director at LandColt Trading.
"Any myth that banks aren't lending money should quickly evaporate as it's obvious now that people are able to obtain a loan, with or without the helpful backing of the Government's tax credit," Schoenberger said.
But Ian Shepherdson, chief U.S. economist at High Frequency Economics, cautioned that there may be more pain ahead for housing.
"We expect another strong number for November, then a sharp drop in sales immediately thereafter, followed by a gradual rebound in H1 next year," Shepherdson wrote in a note to clients. Home prices should continue to increase modestly, he said, "unless inventory jumps next spring, as we fear."
Today's two-year auction was met with decent demand: The Treasury sold $44 billion of the notes, with a high yield of 0.802 percent and a bid-to-cover ratio of 3.16.
Microsoft and News Corp. moved one step closer to an exclusive search agreement, where News Corp.'s news sites, including the Wall Street Journal, would only be available on Microsoft's Bing — and removed from Google.
Ebay is back up and runningfollowing weekend disruptions.
A few earnings reports this morning:
Campbell Soup beat earnings expectations and raised its full-year outlook, helped by price increases and a drop in the cost of ingredients like grains and tomatoes.
Tyson Foods reported earnings of 28 cents a share excluding a large goodwill impairment charge.
The real earnings fireworks come after the closing bell, when Hewlett-Packard is the last Dow component to report.
Cadbury shares rose as Kraft Foods is reportedly mulling a higher bidas Hershey and Italy's Ferrero discuss a possible joint bid for Cadbury. Switzerland's Nestle is now also said to be in the mix.