Stocks jump to new high for the year

NEW YORK — Stocks jumped to new highs for the year today as the dollar extended its slide, boosting prices for commodities including gold and oil. Energy and materials stocks led the market higher. Investors bought stocks for a fourth straight day on growing confidence about the global economic recovery, getting a shot of optimism from news this weekend that the Group of 20 countries will keep stimulus measures in place. Investors saw the agreement as a signal that interest rates would remain low. Major stock indexes rose as much as 2 percent, including the Dow Jones industrial average, which jumped 203 points. Investors around the world are seeing the dollar as weaker than other currencies because of low U.S. interest rates, 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 when those purchases are made. Some analysts are questioning the markets’ moves, and warn that stocks and other investments could suffer big losses if the dollar were to turn higher. Many investors like a weaker dollar because it helps U.S. exporters by making their goods cheaper to overseas buyers and giving the companies a boost when they convert profits from abroad to dollars. The ICE Futures U.S. dollar index, which measures the greenback against a basket of foreign currencies, fell more than 1 percent to its lowest level in 15 months. The dollar rose last year and early this year but the index has been sliding for the past eight months since major stock indicators bounced off 12-year lows. Investors, although they’ve been basing most of their buy or sell decisions on the economy, have also been following a pattern of funneling money into stocks when the dollar weakens and pulling it out when the currency rises. Commodities prices, meanwhile, tend to rise when the dollar is down, so gold topped $1,100 an ounce. Crude oil rose $2 to settle at $79.43 per barrel on the New York Mercantile Exchange, helped in part by Tropical Storm Ida, which threatened the Gulf of Mexico. Energy and materials stocks rose along with commodities prices, and investors’ enthusiasm for those stocks spilled over to other industries.