Global markets closed out a week to remember on Friday after the Nasdaq touched a 10-year high while gold and silver broke record levels in the wake of Federal Reserve Chairman Ben Bernanke's pledge to keep pumping cheap money into the economy.
Silver rose 4% on the week after posting a series of record highs near USD 50 an ounce. On the month, it has jumped 29%, making it the best investment in April.
Major stock indexes including the Nasdaq lagged precious metals but racked up solid weekly and monthly gains, despite worries over the unrest in the Middle East, unsolved public debt problems on both sides of the Atlantic and cost of the natural disasters that ravaged Japan in March.
"There is a big bias towards the market going up and we've seen this through good news and what we would consider bad news," said Kim Caughey Forrest, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh.
"The market kind of shrugs it all off and keeps marching higher."
The billions of dollars the US central bank has created to help the economy have succeeded in inflating asset prices and stemming deflation, but has failed to generate robust growth and to slash unemployment.
Bernanke's promise of keeping US interest rates near zero crushed the dollar which sagged to three-year lows against major currencies this week, as traders piled into "carry trades" using the cheap greenback to fund them.
The Dow Jones industrial average was up 58.54 points, or 0.46%, at 12,821.85. The Standard & Poor's 500 Index was up 2.94 points, or 0.22%, at 1,363.42. The Nasdaq Composite Index was up 1.29 points, or 0.04%, at 2,873.82
European shares gained 0.3%, rising for a seventh straight session, although volumes were crimped by a holiday in Britain for the royal wedding.
World equities as measured by the MSCI index was up 3.9% in April, despite anxiety over oil prices slowing global growth.
Benchmark cr ude oil prices were above USD 125 a barrel in London, near 31-month highs, as the tumbling dollar and violence in North Africa and the Middle East outweighed concerns about slowing US economic growth.
Metals burn bright
Silver roared ahead and gold was set for its seventh consecutive weekly rise, its longest winning streak since 2007. It was last up at USD 1,557.77 an ounce on course for an 8% monthly gain, its biggest since November.
Boosted by the rally in precious metals, the 19-commodity Reuters-Jefferies CRB index, a broad indicator of the commodity market, is up 10% for the year, making it the world's best-performing asset group. In mid-afternoon trading, the CRB was up 1.1% at 370.24, a 52-week intraday high.
April's strength in equity and commodity markets came almost entirely at the dollar's expense after Standard & Poor's revised downward its outlook for the United States' stellar triple-A sovereign credit rating.
The dollar's slide was exacerbated by the Federal Reserve's statement on Wednesday that it intends to keep interest rates at historic lows to help bolster the tepid US economic recovery.
Friday's economic reports reinforced this fragile outlook. Data showed slowing growth in regional manufacturing and high gasoline prices reducing Americans' purchasing power.
"It's still a story of general dollar weakness," said Richard Wiltshire, chief FX broker at ETX Capital. "Markets are pretty thin and there's not a lot of depth to them."
The US dollar index versus major currencies fell as low as 72.834, the lowest since 2008. It fell five straight months, declining
The euro touched a 17-month high against the greenback, trading at USD 1.4844 by 1500 GMT.
Inflation in the 17-nation euro-zone bloc edged up 2.8% in April compared with a year ago -- well above the 2.0% target ceiling of the European Central Bank. Earlier this month, the ECB raised interest rates for the first time in two years. The latest inflation numbers raised prospects for another ECB interest-rate increase soon.
On the other side of the Atlantic, tame inflation in the US supported values of longer-dated US government bonds.
The benchmark US Treasury 10-year note was up 4/32 in price in light volume, yielding 3.29%, its lowest level in more than a month. The bond market consolidated gains made this week on softer economic data and prospects for accommodative monetary policy in the months ahead.
