NEW YORK -- Stocks rose Wednesday after investors' focus returned to the improving health of the U.S. economy.
The Dow Jones industrial average climbed nearly 150 points to return to where it was a week ago, before stocks tumbled on concerns about debt problems in Europe.
Improved economic news helped reassure investors that the recovery is continuing. The Commerce Department said exports rose in March to their highest levels since 2008.
That was a welcome signal for the manufacturing industry, which has been strengthening since last year.
Most European markets posted big gains after better economic numbers signaled that a rebound is occurring in many parts of the continent. Stocks rallied sharply around the world Monday after European leaders agreed to a nearly $1 trillion bailout to help contain the debt problems that spooked markets last week.
While stocks have stabilized, currency markets are still in flux. The euro edged higher against the dollar Wednesday but is still hovering near a 14-month low.
Uncertainty over the long-term health of the euro helped lift gold to a record high. Investors worry that the euro could still lose value as European countries try to work though debt problems by taking on more debt. Many countries also will have to slash spending. Investors have turned to gold as an alternative to holding currencies.
Gold jumped $21.50 to $1,241.80 an ounce. It rose as high as $1,245.40 an ounce. That lifted shares of Freeport-McMoRan Copper & Gold Inc. and Newmont Mining Corp.
Max Bublitz, chief strategist at SCM Advisors in San Francisco, said the swings of the past few weeks spooked investors who had become overconfident. Now, the focus can return to the improving U.S. economy. Expectations of a recovery have driven stocks higher since major stock indexes hit 12-year lows in March last year.
"We got a lot of the bullishness and complacency out of the market," he said. "As long as we have doubters out there, then I'm a lot more comfortable saying the trend that's been in place the last 14 months stays there."
In early afternoon trading, the Dow rose 118.35, or 1.1 percent, to 10,866.61. The Standard & Poor's 500 index rose 12.49, or 1.1 percent, to 1,168.28, while the Nasdaq composite index rose 36.61, or 1.5 percent, to 2,411.92.
Even with the latest gains, major stock indexes stand about where they were a week ago. The market had been climbing steadily since February before last week's tumult on signs of an improving domestic economy.
Bond prices dipped, pushing yields higher. The yield on the benchmark 10-year note, which moves opposite its price, rose to 3.54 percent from 3.53 percent late Tuesday.
Crude oil fell 56 cents to $75.81 per barrel on the New York Mercantile Exchange after the International Energy Agency said global oil demand is expected to rise less than previously expected in 2010.
The Commerce Department said Wednesday that the nation's trade deficit rose to a 15-month high in March as higher oil prices pushed import costs higher. The report also showed exports rose 3.2 percent to their highest level since October 2008, a sign the economy continues to get stronger.
Morgan Stanley shares fell after The Wall Street Journal reported that the investment bank is facing an investigation into its dealings in mortgage securities. The stock fell 83 cents, or 2.9 percent, to $27.55.
A Morgan Stanley spokesman said the bank hasn't been contacted by the Justice Department about the deals in question and that he isn't aware of an investigation.
Freeport-McMoRan rose $2.01, or 2.9 percent, to $72.25, while Newmont Mining rose 84 cents, or 1.4 percent, to $59.04.
About five stocks rose for every one that fell on the New York Stock Exchange, where volume came to 580 million shares, compared with 670 million shares traded at the same point Tuesday.
The Russell 2000 index of smaller companies rose 12.94, or 1.9 percent, to 708.42.
Germany's DAX index jumped 2.4 percent after a report showed its economy grew more than expected in the first quarter. Britain's FTSE 100 climbed 0.9 percent and France's CAC-40 gained 1.1 percent. Japan's Nikkei stock average fell 0.2 percent.