Stocks rose for a third straight day on Wednesday as weakness in the dollar lifted commodity and industrial shares while data underscored optimism that the economy was improving.
Shares of industrial companies that benefit from a weaker dollar gained, including General Electric Co
The dollar continues to get pounded. That translates into higher commodity stocks, and industrials continue to be a beneficiary, of the dollar's weakness, said Michael James, senior trader at regional investment bank Wedbush Morgan in Los Angeles.
U.S. industrial output advanced for a second consecutive month in August, while higher gasoline costs pushed up consumer prices, although economists said the risk of inflation remained low.
That added to optimism that the economy was getting better, a day after Federal Reserve Chairman Ben Bernanke said the recession was very likely over.
Financial companies also were top gainers, with the S&P financial index <.GSPF> up 2.5 percent.
The Dow Jones industrial average <.DJI> was up 98.55 points, or 1.02 percent, at 9,781.96. The Standard & Poor's 500 Index <.SPX> was up 14.08 points, or 1.34 percent, at 1,066.71. The Nasdaq Composite Index <.IXIC> was up 26.92 points, or 1.28 percent, at 2,129.56.
The S&P hit a high for the year shortly after the open, and is now up about 56 percent from the March 9 low. The dollar, meanwhile, dropped to near one-year lows against the euro and a basket of currencies.
Adding to the positive tone was the latest sign that merger and acquisition activity was picking up. Adobe Systems Inc
Adobe was down 6.6 percent at $33.28, while Omniture advanced 26.7 percent to $21.95.
HMO shares advanced after Democrat Senator Max Baucus said his health-care overhaul can pass the Senate. A health-care stock index <.HMO> was up 1.7 percent.
Shares of Exxon Mobil Corp
Gold prices hit 18-month highs. Freeport-McMoran Copper & Gold Inc
(Reporting by Caroline Valetkevitch; Editing by Kenneth Barry)