NEW YORK - The Dow Jones industrial average stormed to its highest level in more than a year Monday as a falling dollar boosted prices for gold, oil and other commodities. Stocks also jumped as investors grew more confident that governments around the world will keep interest rates low to help the global economy.
Energy and materials stocks led the market. The major indexes rose 2 percent and the Dow jumped 200 points for the second time in three days, to its highest level in 13 months.
The advance was further proof that investors, at least for now, aren't troubled by the unemployment rate that has now passed 10 percent.
News that the Group of 20 countries will keep economic stimulus measures in place signaled to investors that rates will remain low. With U.S. rates near zero, the G-20 news lessened demand for the dollar.
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Even as investors are waiting for more signs that the economy is recovering, they've been focusing on the dollar when they make buy and sell decisions. Investors around the world see the dollar as weaker than other currencies, and so they're using it for what's known as "carry trade," to finance purchases of investments in other countries. That trend takes the dollar down further when those purchases are made.
But some analysts question investors' stock moves given the still-weak economy, and warn that stocks and other investments could suffer big losses if the dollar were to turn higher.
"It feels like it's on fumes," said Sean Simko, head of fixed income management at SEI Investments in Oaks, Pa., referring to the market's advance. "Although fundamentals are catching up, they're not caught up."
The ICE Futures U.S. dollar index, which measures the greenback against a basket of foreign currencies, fell to its lowest level in 15 months. Commodities prices, meanwhile, tend to rise when the dollar is down, so gold topped $1,100 an ounce.