Gains continue to start the week with commodities rallying on weak dollar. The Dow ($INDU) gained 56.07 points to a level of 9,497.34. The S&P 500 ($SPX) added 8.99 points to 1,025.39. The Nasdaq ($COMPQ) tacked on 18.99 points, or 0.94 percent, to 2,037.77. Volume was moderate on the session with the NYSE trading 1.45 billion shares and the Naz turning over 2.02 billion shares. Market breadth was positive on the session by a 23-to-7 and 16-to-10 margin on the Big Board and Naz respectively.

A combination of merger news and a rally in commodity prices helped push the major market indices higher Tuesday. The dollar hit a new low in 2009 compared with the euro and this lifted oil prices rising above $71, a gain of 4.5 percent. Gold prices also moved above $1,000 an ounce. When the dollar falls, it normally provides strength in dollar denominated assets like gold and oil. Shares of Exxon Mobil (XOM) rose 2.12 percent with Chevron (CVX) rising 2.20 percent. Overall, the Oil Services HOLDRs (OIH) gained 3.19 percent to 109.41. Shares of Couer D'Alene (CDE) rallied more than 10 percent.

One of the largest moves on the session came from Cadbury (CBY) with the stock rising 38.49 percent to $51.88. The stock gained on a merger offer from Kraft (KFT) for about $16.7 billion. However, CBY rejected the offer, saying it undervalued the company. There are rumors that Hershey's (HSY) might also be interested in CBY, thus pushing the stock above the offer price from KFT. Kraft shares fell 5.87 percent to a price of $26.45.

With a lack of economic and earnings news, analyst upgrades and downgrades got plenty of attention. For General Electric (GE), this was a positive with the stock rising 4.54 percent to $14.50. JPMorgan raised its rating on the stock to "Overweight" from "Neutral." JPM also raised its price target on GE to $17 from $12. These gains in GE are important with many traders looking at GE as a proxy for the broader market.

Shares of American International Group (AIG) continued their volatile ways, falling 10.49 percent Tuesday to $35.85. The insurer was downgraded at Credit Suisse to "Underperform" on the view the common equity has no value. To say AIG has been volatile is a huge understatement with the stock seeing a 52-week range from $6.60 to $493.60.

Jody Osborne
Senior Writer & Options Strategist
Optionetics.com ~ Your Options Education Site