Stocks rebound to hit 13-month high

NEW YORK | Investors halted a three-day losing streak on the stock market Monday, sending prices broadly higher on a weaker dollar and better-than-expected home sales numbers.

Major stock indexes soared more than 1 percent, including the Dow Jones Industrial Average, which hit a 13-month high. Volume was thin ahead of the Thanksgiving holiday, which can exaggerate the size of swings in the market.

The Dow rose 132.79, or 1.3 percent, to 10,450.95, after losing 120 points over the previous three days. The Dow rose as much as 177 points to a 13-month trading high of 10,495.61.

The Standard & Poor’s 500 Index rose 14.86, or 1.4 percent, to 1,106.24, while the Nasdaq Composite Index rose 29.97, or 1.4 percent, to 2,176.01.

Investors found plenty reasons to buy as the day’s developments pointed to two trends: an improving economy and interest rates that are expected to stay low.

*The National Association of Realtors reported that October home sales, which 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 dollar, a key factor in stock trading in recent months, extended its pullback, sending prices for commodities including gold and oil higher and in turn, the stocks of companies that produce them.

Investors were buying Monday on somewhat contradictory forces in the market. 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.

Bond prices were mixed. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.36 percent from 3.37 percent late Friday. The yield on the three-month T-bill, considered one of the safest investments, rose to 0.02 percent from 0.01 percent.

In other trading, the Russell 2000 Index of smaller companies rose 10.13, or 1.7 percent, to 594.81.