U.S. stocks jumped on Monday, pushing the Dow industrials to their highest level in more than a year, as the Group of 20 leaders pledged to keep aid flowing to their economies until a recovery was certain.
The agreement from G20 finance ministers and central bankers over the weekend boosted global stocks while pressuring the dollar as appetite for riskier assets resurfaced.
The falling dollar gave fresh impetus to commodity-linked stocks that benefit from a weaker U.S. currency.
Pharmaceutical and health insurance stocks also rose as investors bet that health reform measures will be softened after a bill calling for a public insurance option and a government role in drug prices narrowly passed its first hurdle.
Stocks rose last week even as the unemployment rate in the United States rose to 10.2 percent. Some investors said rising unemployment would make it harder for the Federal Reserve and the U.S. government to rein in liquidity and stimulus measures as the recovery takes hold.
The G20 simply put an exclamation point on that reality, said Craig Peckham, equity trading strategist at Jefferies & Company in New York, who said the easy money was lifting stock prices.
The S&P 500 is up about 61 percent from a 12-year closing low in early March.
The Dow Jones industrial average <.DJI> gained 173.67 points, or 1.73 percent, to 10,197.09. The Standard & Poor's 500 Index <.SPX> added 19.68 points, or 1.84 percent, to 1,088.98. The Nasdaq Composite Index <.IXIC> rose 34.15 points, or 1.62 percent, to 2,146.59.
Gold miners' stocks moved sharply higher as spot gold hit a new record high, driven by the weaker dollar and concerns that loose monetary policy would eventually devalue currencies.
The NYSE Arca Gold BUGS index <.HUI>, which measures the performance of 15 gold producers with U.S.-traded shares, rose 4.4 percent. Newmont Mining Corp
The Morgan Stanley Healthcare Payor index <.HMO> was up 1.5 percent, while the NYSE Arca Pharmaceutical index <.DRG> rose 1.6 percent.
The U.S. House of Representatives passed a healthcare reform bill in a narrow vote over the weekend. The bill will now move to the Senate for approval.
The Senate remains very unlikely to pass any bill containing an unbridled public plan that could ultimately threaten significant price deflation for U.S. sales, said Andrew Baum, a Morgan Stanley pharmaceutical analyst.
Corporate mergers and acquisitions also helped the market, with General Electric Co
Kraft Foods Inc
Sprint Nextel Corp
Oil futures jumped 3.1 percent, or $2.37, to $79.80 a barrel, and gold hit a record high above $1,110 an ounce, as the dollar index <.DXY> slid 1 percent.
(Additional reporting by Susan Heavey; Editing by Jan Paschal)