Stocks rally as dollar gives respite; crude falls further

Thu Mar 12, 2015 4:54pm EDT
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By Rodrigo Campos

NEW YORK (Reuters) - Stocks on major markets rose on Thursday as the dollar softened the most in a month against major currencies after surprisingly weak U.S. data.

The U.S. currency retraced its gains after earlier hitting a 12-year high versus the euro, pressured by a third-straight decline in monthly U.S. retail sales. However, the data was not weak enough to alter a recent shift in views that the Federal Reserve is getting closer to raising rates.

Oil futures fell as estimates showed another big supply build at the delivery point for the U.S. crude contract.

Stocks on Wall Street posted their biggest gains since early February. Bank shares were among the leaders after the Federal Reserve approved most of their capital plans, triggering an avalanche of buy-back and dividend hike announcements.

The S&P 500, however, was still on track to post its third consecutive weekly decline, hit by the prospect of higher U.S. interest rates and the effect of the strong dollar on corporate earnings. The much stronger-than-expected payrolls report last Friday cemented views of a rate hike coming sooner than previously expected.

The soft February retail sales data should not move the conversation in regard to monetary policy, according to Art Hogan, chief market strategist at Wunderlich Securities in New York.

"Online sales were actually pretty good, which would indicate there was some weather impact," he said.

"There's a little relief after such a significant move in the dollar," he added. "The (equities) market acts like a coiled spring, and rebounds."   Continued...

A picture illustration shows U.S. Dollar and Euro banknotes on a pair of scales in Vienna March 11, 2015.  REUTERS/Heinz-Peter Bader