Riding a wave of buying interest for most commodities, steel stocks surged Wednesday as the dollar dropped a day after the Federal Reserve's latest rate hike. The Fed hinted at further monetary tightening on Tuesday, sparking a selloff in bonds and stocks, and a surge in the dollar. Bonds continued to dip Wednesday, with the yield of the benchmark 10-year Treasury rising to a 21-month high of 4.81% following an unsuccessful auction of five-year notes. But the dollar and stocks reversed the previous day's action. The Nasdaq Composite, which had been lagging the other major indices in recent weeks, jumped 1.45% to 2337, a five-year high. The rally was led by semiconductor shares and fueled by a positive note on Sun Microsystems ( SUNW). The S&P 500 rose 0.75% to 1302. The Dow Jones Industrial Average gained 61 points, or 0.55%, to 11,215. 3M ( MMM) rose 1.7% after Merrill Lynch upgraded the stock. The blue-chip average, however, was restrained by Caterpillar ( CAT), which fell 1.6% after a downgrade by UBS. General Motors ( GM) also weighed on the Dow, losing 2.6%, after the company said late Tuesday that its accounting woes extend to its financing arm, GM Acceptance Corp. Here's more bad news for GM: The price of steel is making a comeback after weakness late last year. It's next to impossible to obtain an average daily price given the fragmentation of the steel market. But according to Forbes, the price of a hot-rolled band has increased to $570 per ton from $540 just in the last three months. That's good news for steelmakers and distributors, whose stocks also have surged in the first three months of 2006. On Wednesday, shares of Steel Dynamics ( STLD) jumped 7.3% after KeyBank upgraded the stock, expecting upward earnings revisions.