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"At some point, we will see some sort of a pullback, but it doesn't seem like it's going to be right now," said Wren. "In the near term we're probably going to trade a little bit higher." The stock market rally is also is being underpinned by investors moving back into stocks, reversing years of outflows of funds from equity markets, said Jerry Braakman, chief investment officer at First American Trust. Investors have invested about net $17 billion into domestic stock mutual funds since the start of the year, according to data from the Investment Company Institute. Investors have pulled money out of mutual funds every year since the beginning of the financial crisis in 2007. "This market rally still has legs, partly because we've seen huge retail inflows back into equities," Braakman said. "It's hard to beat the money flow." In commodities trading, the price of crude oil rose 69 cents, or 0.7 percent, to $96.71 a barrel. The price of gold rose for the first day in eight as the dollar fell. The precious metal climbed $19.40, or 1.4 percent, to $1,384. Gold has slumped this month as its attraction as an alternative investment fades as the dollar appreciates. The U.S. currency is strengthening because investors believe the U.S. economy is in better shape than the Japanese or European economies. The dollar's rally paused on Monday, though, and the U.S. currency fell against the euro and the yen. The dollar index also dropped, after climbing to its highest level in close to three years Friday. In U.S. government bond trading, the yield on the 10-year Treasury note rose to 1.97 percent from 1.93 percent. The Nasdaq composite index fell 2.53 points, or 0.1 percent, to 3,496.43 points. Among stocks in focus on Monday: Actavis rose $1.65, or 1.3 percent, to $127.15 after the pharmaceutical company said it's buying Warner Chilcott. The all-stock deal, valued at $8.5 billion, would create the third-biggest specialty pharmaceutical company in the U.S. Chesapeake Energy rose 53 cents, or 2.6 percent, to $20.80 after the natural gas producer named Anadarko Petroleum executive Robert Douglas Lawler as its new CEO. He takes over as Chesapeake continues selling assets to pare down an enormous debt burden. Websense, an Internet security firm, surged $5.53, or 29 percent, to $24.76 after the company agreed to be taken private for $906 million by private equity firm Vista Equity Partners.
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