Stocks surged today, propelled by hopes for an interest rate cut and expectation-busting fourth-quarter results from IBM. "The Fed has a very hard job right now, but I think the market is saying it thinks they are up to the task," a trading exec told the Wall Street Journal. The Dow jumped 171.85 to 12,778.15, the Nasdaq 38.36 to 2,478.30, and the S&P 500 15.23 to 1,416.25.
The dollar sank, and gold rose above $900 per ounce. Hopes for a rate cut derive from Fed chairman Ben Bernanke's comments last week that "substantive" action should be taken when the central bank next meets, at the end of the month. In response, the euro hit a new high against the dollar, topping $1.49.