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The stock market advanced for the tenth time in 11 sessions to set a new two-year high as financials provided leadership in the face of a narrow gain by the greenback. However, action was generally anemic again as share volume dwindled.
The major stock indices of both Europe and Asia moved markedly higher overnight. Their gains helped inspire buying at home, such that domestic averages gapped higher in the early going.
Financials were quick to provide leadership to the broader market as the sector settled with a 1.6% gain. Bank stocks were especially strong. Diversified banks ripped to a 2.2% gain while regional banks advanced 1.9%. Toronto-Dominion Bank (TD 71.95, +2.44) was a standout after the outfit confirmed its plan to take over Chrysler Financial. The $6.3 billion acquisition comes as part of the firm's expansionary effort.
Strength in the financial sector helped push the S&P 500 through near-term resistance around the 1250 zone. A couple of hours was spent consolidating those gains along the 1254 line before some late buying took the stock market to its best level since September 2008. The late move lost momentum, though, and the stock market settled in the 1254 to 1255 zone.
It is impressive that the stock market's advance came after the dollar turned an early loss into a narrow gain. Early weakness in the greenback came as the euro advanced after China's Vice Premier expressed that his country supports efforts by the European Union and International Monetary Fund to stem sovereign debt problems of the eurozone and countries in its periphery. Gains by the euro were partly clipped by early morning news that analysts at Moody's put Portugal's credit rating on review for possible downgrade, but were later completely dashed shortly after analysts at Fitch issued cautious commentary on Greece's credit rating.
Earnings news was limited. Both Jabil Circuit (JBL 19.55, +1.89) and Adobe Systems (ADBE 30.93, +1.75) posted better-than-expected earnings then went on to issue upside guidance.
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