Dollar powers to fresh highs; stocks and oil fall

Fri Mar 13, 2015 5:00pm EDT
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By Rodrigo Campos

NEW YORK (Reuters) - The dollar surged on Friday as weak inflation data failed to stem expectations the Federal Reserve will move to tighten monetary policy, and the greenback's rise pressured stocks and commodities.

The dollar index .DXY rose 0.8 percent, setting up its first close above 100 since April 2003. The Fed's policy-setting committee meets next week.

Stocks fell on Wall Street on concerns of the impact of higher rates and a stronger dollar on corporate profits. The S&P 500 was down for a third straight week, though it is just 3 percent below its record high set early this month.

"The stronger dollar, the continued hammering of the euro equals continued lower equity prices ahead of the Fed comments next week," said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles. "We'll know more of the Fed's thinking on Wednesday but right now most people are expecting a rate hike to come in June and the equity markets not to be very receptive of that."

The Dow Jones industrial average .DJI fell 145.91 points, or 0.82 percent, to 17,749.31, the S&P 500 .SPX lost 12.55 points, or 0.61 percent, to 2,053.4, and the Nasdaq Composite .IXIC dropped 21.53 points, or 0.44 percent, to 4,871.76.

For the week, the Dow was down 0.6 percent, the S&P 500 was off 0.9 percent and the Nasdaq was down 1.1 percent .

The MSCI All-Country World equity index .MIWD00000PUS fell 0.6 percent.

The FTSEurofirst 300 pan-European index .FTEU3 closed up 0.3 percent. Stocks in Europe continued to be supported by the massive bond-buying program at the European Central Bank.   Continued...

A picture illustration shows Euro and U.S. dollar banknotes in Sarajevo March 9, 2015. REUTERS/Dado Ruvic