YAHOO [BRIEFING.COM]: Strong, broad-based buying one day after the Fed unveiled plans for further quantitative easing sent stocks sharply higher, such that the three major equity averages set fresh 2-year highs.

Yesterday's unveiling of the Fed's plan to purchase another $600 billion of longer-term Treasuries reflected its accommodative stance. That helped spur overseas markets higher and drove down the dollar, which fell to a new 2010 low before it was quoted with a 0.5% loss at the close of trade.

Such supportive themes for stock prices helped the S&P 500 and Nasdaq Composite make their biggest spike in about four weeks. The Dow booked its best gain in two months.

Commodity and resource-linked stocks led for most of the session. Strength in that space helped the energy sector climb 3.0% and the materials sector ascend 3.3%.

Their strength was shared in the commodity pits, where December contracts for silver surged 6.2% to settle at $26.04 per ounce. Prior to that silver set a fresh 30-year high at $26.10 per ounce. December contracts for gold rallied 3.4% to close at $1383.10 per ounce. It set a new all time high of $1384.80 per ounce. Such strength helped the CRB Commodity Index hit a new two-year high with a 2.4% spike. That was its third biggest spike by percent this year.

Financials boasted the biggest gains of the session, however. The sector surged 3.4% as bank stocks bounded in response to broader market support and headlines that the Fed will give stronger, better capitalized banks the ability to raise dividends, even though many already have the ability to raise dividends.

Many investors were also pleased to hear that President Obama is open to discussing an extension of former President Bush's tax cuts for all incomes. There was not a dramatic reaction among stocks, though, since stocks had already moved sharply higher by the time the headline crossed newswires.

Earnings had no real influence over broader market action this session, mostly because there were no bellwethers or stalwarts in the bunch. That will likely be the case again tomorrow.

Economic data was generally disregarded, too. Initial jobless claims for the week ended October 30 totaled 457,000, which is greater than the 445,000 initial claims that had been expected, on average, among economists polled by Briefing.com. The latest tally marked a week-over-week increase of 20,000. As for continuing claims, they fell to 4.34 million from 4.38 million in the prior week. The weekly data precedes tomorrow's official nonfarm payrolls report for October.

Nonfarm productivity in the third quarter increased by 1.9%, which is better than the 0.9% increase that had been widely expected. Third quarter unit labor costs actually fell 0.1% when they were expected to increase 1.0%.

Trading volume on the NYSE hit its highest level in two weeks as money moved in from the sidelines. However, it is still too early to tell whether this session's surge was enough to attract retail investors back to action.

The positive tone to trade caused the Volatility Index (VIX) to drop for the third straight session for a cumulative loss of 15%. That has the VIX back near the six-month low that it set just a couple of weeks ago.

The benchmark 10-year Note had another strong session, thanks to momentum from news yesterday that the Fed's plan to purchase Treasuries will include those with maturities that range from two years to 10 years. The yield on the 10-year Note is now down to 2.48% after it had been almost as high as 2.73% just last week.

It was an exceptional day for the commodities complex, with every group posting gains. Substantial weakness in the dollar, following yesterday's QE2 announcement, was the catalyst for today's rally. Precious metals surged 4.8%, while grains added 2.6% and soft commodities added 2.2%. The largest move in the sector belongs to Dec silver, which gained 6.2% to finish at $26.043. It traded to a fresh 30-yr high at $26.10 and closed just shy of that high. Dec gold rallied for 3.4% to close at $1383.10 per ounce. It traded to a new all time high at $1384.80.

Dec crude oil rallied for 2.1% to finish at $86.49, its best close in seven months. The weaker dollar, coupled with strength in equities pushed crude to trade to its highest levels since early May. Dec natural gas ended up 0.4% to $3.83 per MMBtu.

Advancing Sectors: Financials (+3.4%), Materials (+3.3%), Energy (+3.0%), Industrials (+2.2%), Tech (+1.6%), Consumer Discretionary (+1.6), Telecom (+1.4%), Consumer Staples (+1.2%), Utilities (+1.0%), Health Care (+0.4%)
Declining Sectors: (None)DJ30 +219.71 NASDAQ +37.07 NQ100 +1.4% R2K +2.6% SP400 +1.9% SP500 +23.10 NASDAQ Adv/Vol/Dec 2002/2.53 bln/662 NYSE Adv/Vol/Dec 2515/1.38 bln/492