Is the Stock Market Closing Higher Due to Trading or the Weakness of the Dollar?

Dollar Value vs Stock Prices

AP News – U.S. stocks closed higher for the second consecutive day, helped by strength in shares of commodity-related companies even as major retailers said they remain cautious ahead of the holiday season. At the end of a session that lacked conviction, major stock indexes managed to reach their fresh 13-month highs. A smaller-than-anticipated rise in industrial production also weighed on sentiments.

Waning risk appetites sent gold prices up 20 cents to a fresh all-time high of $1,139.40. Treasuries rose, pushing corresponding yields lower. The yield on the benchmark 10-year note slipped to 3.33% from 3.34% late Monday. Crude prices closed above $79 per barrel. Copper prices rose to 14-months highs on expectations that China demand will remain robust.

A perpetual decline in the value of the dollar and record low interest rates in the US have driven stocks higher as investors, seeking higher return on their investments, have sought refuge in equities. A subdued inflation has also proved welcome for the economy.

This morning’s stock futures show a mixed opening on the Street. Dow Jones industrial average futures are down 2 points, or about 0.1%, at 10,396. Standard & Poor’s 500 index futures are up 0.10, or nearly 0.1%, at 1,107.50, while Nasdaq 100 index futures are down 5.50, or 0.3%, at 1.803.25.

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