Money & Investing – Banks.com

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After closing out 2009 with a drop of nearly 150 points, the Dow is roaring back today after a long holiday weekend, gaining more than 140 points in early trading. The Nasdaq and the S&P 500 are both also posting significant gains this morning. It appears that things are looking a little better for the economy as well, with improvement expected to continue into 2010.

One of the main catalysts for today’s rally is Ben Bernanke. Yesterday, Bernanke made a speech blaming shortfalls in the regulatory system for the housing market bubble prior to the recent crash. He insisted that monetary policy wasn’t the problem. Additionally, the Fed, through Vice Chair Donald Kohn, hinted that interest rates are likely to remain low for some time. This is giving investors heart, since lower rates mean that companies can borrow money less expensively, lowering their costs and keeping interest fees from eating into their earnings.

There are hopes that January will signal the beginning of a good year for the stock market, and it should as long as holiday retail sales hold up, and as long consumer spending continues to increase.

Gold and oil prices rise

Also seeing success today are oil and gold prices. Gold prices are climbing back toward the $1,120 mark, and oil futures breached $81 a barrel. The fact that the economic recovery appears to be moving in train is helping commodities as expectations of demand drives speculation for commodities. Gold is often used as a hedge against inflation, and many believe that inflation will be a product of economic recovery. Oil prices appear to be recovering on the hopes that an improving economy will mean more demand for oil, and that leads to shrinking supply — and higher prices.

Disclaimer: I am not an investment professional. Nothing in this piece or on this Web site should be construed as investment advice. Before making investment decisions, do your own research and/or consult with an investment professional. All investment comes with the risk of loss. You are responsible for your own investment decisions and any loss that may result from your decisions.