NEW YORK — The stock market ended a three-day losing streak Monday, closing broadly higher as a weaker dollar and upbeat home-resales numbers encouraged investors to take on more risk.
Major stock indexes soared more than 1 percent, including the Dow Jones industrials, which rose 133 points to a 13-month high.
Volume was light as Thanksgiving approached, and that likely padded some of the market’s advance.
Investors who fled to the safety of the dollar and Treasurys in recent days found plenty of reasons to return to stocks Monday. The day’s developments pointed to two key trends: a recovering economy and interest rates that are expected to stay low.
The dollar resumed its long slide, sending prices for commodities, including gold and oil, higher and, in turn, the stocks of companies that produce them.
A National Association of Realtors report that October home resales rose more than 10 percent revived investors’ optimism after disappointing data on the housing industry last week raised concerns about the strength of the economic recovery.
Charles Evans, head of the Federal Reserve Bank of Chicago, was quoted as saying he saw little risk that the economy would slide back into recession, although unemployment is unlikely to fall until next summer. And James Bullard, president of the Federal Reserve Bank in St. Louis, said the U.S. Fed should continue to buy mortgage- backed securities after the program is supposed to expire in March. That would continue to keep interest rates low.
The Dow rose 132.79, 1.3 percent, to 10,450.95, after losing 120 points over the previous three days. It was the Dow’s highest close since Oct. 2, 2008.
The Standard & Poor’s 500 rose 14.86, 1.4 percent, to 1,106.24, while the Nasdaq composite rose 29.97, 1.4 percent, to 2,176.01. The index is up 63.5 percent from a 12-year low in March.
Investors were buying Monday on somewhat contradictory forces.
The strength in housing is a sign of an improving economy, which could argue in favor of raising rates, while the dollar’s weakness points to rates remaining low. Analysts say investors who still have plenty of available cash are primed to buy, and so the market may also be rising on its own momentum.
Phil Orlando, chief equity- market strategist at Federated Investors, said some investors will look for dips in the rally as a way to get into the market, not wanting to end the year without participating in some of the big gains stocks have made.
“Bearish managers are sweating bullets that they’re not going to be able to get that cash in the market, and they need to do that,” he said. “That is why any pullback we’ve seen this year has been met with a wave of cash that has pushed stocks up higher.”
