NEW YORK - Stocks rose moderately Monday on growing expectations that the Federal Reserve will take steps to boost the economy -- and possibly send inflation climbing as well.
A falling dollar that contributed to a jump in commodity prices also helped push the Dow Jones industrial average up 31 points to its highest close since late April.
Traders are widely expecting the Fed to expand its program to buy bonds as a way to stimulate the economy. That would push bond yields down and, in turn, would make stocks a more attractive investment.
Bank of America Corp. and J.P. Morgan Chase & Co. each fell more than 1.5 percent, as the banks again faced questions into how they and other financial companies have handled foreclosures. The financial industry joined utilities as the only two segments of the Standard and Poor's 500 index to lose ground.
For the second time in the past week, the Dow eclipsed its highest closing level this year, only to quickly pull back. It closed at 11,205.03 on April 26. The average rose 31.49, or 0.3 percent, to 11,164.05. The broader S&P 500 index rose 2.54, or 0.2 percent, to 1,185.62, while the technology-focused Nasdaq composite index rose 11.46, or 0.5 percent, to 2,490.85.
The National Association of Realtors said sales of previously occupied homes rose 10 percent last month. However, sales remain extremely weak compared with where they were just a year ago, which is likely keeping enthusiasm over the news in check.
The dollar fell against other major currencies. It hit a fresh 15-year low against Japan's yen. Three stocks rose for every two that fell on the New York Stock Exchange, where volume came to 1 billion shares.
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