Photo / AP

Photo / AP

The Dow Jones industrial average stormed to its highest level in more than a year today as a falling dollar boosted prices for commodities including gold and oil.

Stocks also jumped as investors grew more confident that governments around the world will keep interest rates low to help the global economy.

The Dow rose 203.52, or 2 per cent, to 10,226.94, its highest finish since October 3, 2008. The index rose as high as 10,228.23, topping its previous 12-month trading high of 10,119.46 set last month.

The broader Standard & Poor's 500 index rose 23.78, or 2.2 per cent, to 1,093.08, its sixth straight advance.

The Nasdaq composite index rose 41.62, or 2 per cent, to 2,154.06.

Five stocks rose for every one that fell on the New York Stock Exchange, where volume came to 1.2 billion shares compared with 1.1 billion Friday.

Energy and materials stocks led the market. The major indexes rose 2 per cent and the Dow jumped 200 points for the second time in three days and reached its highest level in 13 months.

News that the Group of 20 countries will keep their economic stimulus measures in place signaled to investors that rates will remain low. With US rates near zero, the G-20 news lessened demand for the dollar.

Even as investors are waiting for more signs that the economy is recovering, they've been focusing on the dollar's moves when they make their 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 are questioning the stock market's 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, Pennsylvania, referring to the market's advance. "Although fundamentals are catching up, they're not caught up."

He said the dollar's drop and the current surge in stocks and commodities are making it hard for investors to get a clear picture of how fast the economy is rebounding.

Retailers had some of the biggest gains in the market's broad advance. Abercrombie & Fitch Co. rose $2.58, or 7.4 per cent, to $37.59 after several analysts said international growth would boost growth at the teen apparel retailer. The company is slated to post its fiscal third-quarter numbers Friday.

Investors are looking for any insight into how much consumers are spending as the holidays approach. J.C. Penney Co., Macy's Inc. and Wal-Mart Stores Inc. are among the stores expected to post quarterly results this week.

- AP