U.S. stocks surged to their 13-month highs Monday as a weaker dollar and a rebound in U.S. retail sales reinforced hopes that an economic recovery is indeed underway.  Stocks also got a boost after Fed chairman Ben Bernanke reiterated Fed’s intention to keep interest rates low for an extended period. 

Gold advanced 2% to fresh record highs; and the price of silver jumped 5.9%.  The initial gains in the equity prices followed strength in Asian markets yesterday.  Strength in Asia was partly helped by reports that said Japanese economy grew at its fastest pace in over two years, up 1.2% during the third quarter.  To add to the bullish mood in the region, leaders of the Asia Pacific Economic Cooperation promised to keep the stimulus measures in place.

On Monday, the 30-stock Dow Jones industrial average rose 136.49 points, or 1.33%, to 10,406.96. The broad Standard & Poor’s 500-stock index was up 15.82 points, or 1.45%, at 1,109.30. The tech-heavy Nasdaq composite index gained 29.97 points, or 1.38%, to 2,197.85.  On the New York Stock Exchange, 25 stocks were higher in price for every six that declined.

Bernanke warned of threatening headwinds from rising unemployment and tight credit but added comments supporting the government’s stimulus measures.  Yields on US Treasuries declined, with the yield on the 2-years touching its lowest since last January.  At session’s end, Meredith Whitney questioned the fundamentals of the current stock market rally, and said she expected a double-dip recession next year.

Analysts, meanwhile, raised their ratings on number of firms.  Goldman Sachs (NYSE:GS) raised its rating on Nordstrom (NYSE:JWN) from “neutral” to “buy,” saying the firm would be a “key beneficiary of a recovery in high-end consumer” demand.  Goldman’s analysts also started their coverage on Dell (NASDAQ:DELL) with a “buy” rating, saying the company would benefit from the PC upgrade cycle.  JP Morgan’s (NYSE:JPM) added US Steel (NYSE:X) and AK Steel (NYSE:AKS) to its focus list.

A number of key retailer results are slated for today’s release, looked to for guidance on current consumer demand. Among companies reporting today are: Home Depot (NYSE:HD), Target (NYSE:TGT), TJ Maxx (NYSE:TJX), Saks (NYSE:SKS), Autodesk (NASDAQ:ADSK), and Salesforce.com (NYSE:CRM).

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