Stocks up broadly; U.S. helped by dollar weakness
By Ryan Vlastelica
NEW YORK (Reuters) - The U.S. dollar weakened broadly on Monday ahead of the Federal Reserve's policy meeting on worries that the central bank could become more cautious about raising interest rates, while Wall Street stocks rose as the greenback's fall eased worries about its effect on corporate profits.
Crude oil fell 2 percent in a day of volatile trade. U.S. crude at one point fell more than 4 percent to hit a six-year low before paring losses in afternoon trading.
The euro EUR= rose 0.7 percent $1.0569, after marking its biggest weekly fall since September 2011 last week. The currency has lost about a quarter of its value against the dollar since mid-2014, a slump that many investors have speculated is overdone.
Comments by Italy's central bank governor that the euro has fallen faster than the European Central Bank expected contributed to the currency's rise on Monday as the European Central Bank launched quantitative easing.
The U.S. dollar index .DXY, which measures the greenback against a basket of currencies, fell 0.6 percent.
The strength of the dollar has been a source of concern in U.S. equities markets because of the effect on the profits of multinational corporations.
"Earnings estimates for 2015 continue to be marked down, in large part because of the strength of the dollar. Any relief from the dollar's strength means relief on that profit headwind, and a re-acceleration in profit growth is what the market is looking for," said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.
But European stocks rose on continued expectations that the region's economy will benefit from a weakened euro. Continued...