Sam Collins

Look for Stocks to Continue to Push Higher

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The stock market did a flip yesterday. In contrast to Monday's lower opening and lower close, yesterday the market opened higher and held its gains right to the end.

On Monday, the financials took a hit, but yesterday financials, energy and materials were the leaders. The energy sector was up 1.4%, materials gained 1.2%, and financials led the list, up 2.3%. And real-estate investment trusts (REITs) moved sharply higher ahead of several REIT initial public offerings.

Much of this flip was due to a lower U.S. dollar, which, in turn, led to buying in commodities and stocks related to them.

The US Dollar Index fell 0.9%, its worst daily loss in two months, while the euro hit a new high for 2009 of $1.48. In fact, the dollar weakened against every major currency. (Learn how you can profit from a falling dollar.)

At the close, the Dow Jones Industrial Average (DJI) rose 51 points to 9,830, the S&P 500 (SPX) gained 7 points to 1,072, and the Nasdaq (NASD) rose 8 points to 2,146.

Volume contracted to 1.3 billion shares traded on the NYSE, and advancers were ahead of decliners by slightly less than 3-to-1. The Nasdaq traded 739 million shares with advancers there ahead by 15-to-11.

October crude oil, which expired yesterday, rose $1.84 to $71.55 a barrel, and the Energy Select Sector SPDR (XLE) gained 86 cents, closing at $55.57. The recent rise in the XLE may signal a new round of buying, as last week it broke out of the top at $55 with the next target being $64. 

As the dollar fell, gold rose, and the December contract gained $10.60, closing at $1,015.50 an ounce. The PHLX Gold/Silver Index (XAU) gained $3.84, closing at $169.86, but there is heavy resistance at $180 to $200 from a band of trading that took place from October 2007 to July 2008.