Stock indices extended their gains on Monday boosted by a strong outlook for the global economy. In the meantime, the outlook for the U.S. recovery weakened as July PMI fell and Fed Chairman Bernanke expressed his concerns for labor and housing.

News of an improving global economy sent global equity markets sharply higher in a rally that never looked back. Stronger global PMI reports drove up demand for risky assets as traders begin to price in a weakening U.S. economy.

Traders seeking higher return on their investments sold the lower yielding Dollar and Treasury instruments to take advantage of the strong rally in equity markets today. The rally began overnight in Asia and quickly spread to Europe. U.S. traders, who have had ample opportunities to buy equities on dips during the past week, chased the market higher from the opening.

source: futureshound.com