Money Supply and Wall Street
As the theory of demand and supply goes, when the supply of anything increases prices will fall. Therefore when the supply of a currency increases the overall value of that currency against its counter parts will generally fall.
An effect that a lower currency has on exporters is that they earn more from the sales of goods to the international market, in part, because of the lower value of their home currency. Put another way, the cheaper a US made products are, the more attractive they are to an overseas customer, particularly because an increase in value of their currency against that of the US dollar increases their spending power.
Therefore, when the supply of money is increased the stock market anticipates greater earnings on the part of exporters of goods and services, and therefore may start putting a premium on certain stocks, primarily those that stand to benefit from the expected increased economic activity.
Another effect of QE is a decrease in interest rates. Since QE generally lowers yields on U.S. Treasury Bills, this reduces the overall cost of borrowing money. Lower interest rates translate into lower borrowing costs for business and consumers, which in turn means that they can borrow more to expand and finance their interests.
This effect does take some time to trickle down to money borrowers, but the net result is greater economic activity on the part of businesses and consumers alike.