* Fed chairman downbeat on economy, says watching dollar
* Commodity stocks lead broad-based advance
* Dow up 1.3 pct; S&P 500 up 1.5 pct; Nasdaq up 1.4 pct
* For up-to-the-minute market news, click []
(Adds volume)
By Ellis Mnyandu
NEW YORK, Nov 16 (Reuters) - U.S. stocks rose broadly on
Monday, sending indexes to fresh 13-month closing highs, after
Federal Reserve Chairman Ben Bernanke reinforced expectations
that interest rates would stay low to spur growth.
Bernanke repeated that the Fed was likely to keep interest
rates exceptionally low for "an extended period," a pledge that
weighed on the U.S. dollar and drove investors to snap up
shares of natural resource companies as prices of global
commodities -- from gold to wheat -- shot higher.
In a speech before the Economic Club of New York, Bernanke
said the recovery would not be as robust as previously hoped,
and rising unemployment and tight bank lending were significant
headwinds.
The S&P materials <.GSPM> and energy <.GSPE> indexes each
climbed more than 2.3 percent. Individual stock standouts
included Exxon Mobil Corp <XOM.N>, up 2.7 percent to $74.43
amid higher crude oil prices, and Caterpillar Inc <CAT.N> up
2.8 percent.
"The overriding message from Bernanke is that interest
rates will stay low and remain low for the near to medium term.
It seems that the market likes that," said Dennis Cajigas,
senior market strategist at Lind-Waldock, a retail brokerage
firm in Chicago.
"Investors essentially are borrowing against low rates in
the dollar and putting that money in areas that they feel will
react well against inflation, such as crude oil, energy, gold,
commodities (and) stocks because the expected return should be
higher over time."
In the last hour of trading stocks briefly pared gains as
Meredith Whitney, a prominent analyst, said in a CNBC
television interview the stock market run-up was not supported
by fundamentals. []
The Dow Jones industrial average <> gained 136.49
points, or 1.33 percent, to 10,406.96. The Standard & Poor's
500 Index <.SPX> shot up 15.82 points, or 1.45 percent, to
1,109.30 -- its first close above the psychologically important
1,100 level for the first time since October 2008.
The Nasdaq Composite Index <> jumped 29.97 points, or
1.38 percent, to 2,197.85.
The benchmark S&P 500 is now up 64 percent since the
12-year closing low of March 9.
Caterpillar, whose fortunes are closely tied to the
commodities industries, was one of the biggest boosts to the
Dow, along with Boeing Co <BA.N>, up 3.6 percent to $52.48.
Shares of AK Steel Holding Corp <AKS.N> rose 7.9 percent to
$18.77, while gold miner Newmont Mining Corp <NEM.N> added 2.8
percent to $52.39. The ARCA gold bugs index <.HUI> jumped 3.3
percent after COMEX December gold <GCZ9> hit a record above
$1,140 an ounce.
On Nasdaq, Intel Corp <INTC.O> shares rose 2.2 percent to
$20.25 after the chipmaker raised its quarterly dividend by
more than 12.5 percent. The semiconductor index <.SOXX> climbed
2 percent. []
Monday's economic data showed October retail sales rose a
brisk 1.4 percent last month but were much less impressive with
auto sales stripped out. In addition, September figures were
revised to show a larger drop overall than earlier reported.
[]
Even though Bernanke made a rare statement on foreign
exchange markets, saying the Fed was watching the U.S. dollar
closely, the greenback found very little reprieve.
The United States and China failed to reach an agreement
over currencies at a summit of the Asia Pacific Economic
Cooperation forum in Singapore.
Bernanke, commenting on the dollar's decline, said the Fed
is attentive to changes in the U.S. currency, and the Fed's
mandate will help ensure the greenback remains strong.
[].
"If you take away stimulus, this economy falls apart. He
knows it. He's boxed in here, he can't raise rates. It's
impossible," said Joe Saluzzi, co-manager of trading at Themis
Trading in Chatham, New Jersey. "So what do we do? We continue
to buy equities because that's what the trade is."
Volume was moderate, with about 1.15 billion shares
changing hands on the New York Stock Exchange, below last
year's estimated daily average of 1.49 billion. On the Nasdaq,
about 2.13 billion shares traded, below last year's daily
average of 2.28 billion.
Advancing stocks outnumbered decliners on the NYSE by a
ratio of about 9 to 2, while on the Nasdaq, nearly seven stocks
rose for every two that fell.
(Additional reporting by Rodrigo Campos; Editing by Padraic
Cassidy)
