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NEW YORK (Reuters) - The U.S. dollar fell sharply on Tuesday, weighed by mixed retail sales data and economic growth predictions, while crude rose after a surprise drop in forecasts for U.S. shale oil production.
Energy shares buoyed stocks on Wall Street, with investors also focused on U.S. corporate earnings and the data miss. A lower full-year earnings forecast from Johnson & Johnson due to the impact of dollar strength kept gains in check.
Angst over the stronger dollar added to a list of concerns throughout the first quarter that have lowered estimates on corporate earnings.
"Expectations are low, primarily because of economic weakness during the first quarter related to weather, the strong dollar, the West Coast dock strike and oil prices," said Tim Ghriskey, chief investment officer of Solaris Group in Bedford Hills, New York.
The Dow Jones industrial average rose 59.66 points, or 0.33 percent, to 18,036.7, the S&P 500 gained 3.41 points, or 0.16 percent, to 2,095.84 and the Nasdaq Composite fell 10.96 points, or 0.22 percent, to 4,977.29.
The S&P energy sector jumped 1.8 percent.
The FTSEurofirst 300 index of top European shares ended down 0.45 percent after touching its highest since November 2000. Nikkei futures edged up 0.2 percent.
Despite its recent strength, the U.S. dollar fell on Tuesday after U.S. retail sales rose in March for the first time since last year but at a slower pace than expected.
The greenback was also hit by the International Monetary Fund's lowered forecasts for U.S. growth, to 3.1 percent for this year and next, from January's expectations of 3.6 percent and 3.3 percent, respectively.
"I wouldn't be surprised if people bring down Q1 GDP forecasts on the data," said Marc Chandler, global head of currency strategy at Brown Brothers Harriman in New York.
"Couple that with the IMF (forecasts), and I think you have reason to trim (dollar) positions," he said.
The euro strengthened 0.8 percent against the greenback at $1.0649 following six consecutive sessions of losses. The dollar index fell 0.7 percent.
Crude oil rose after a forecast that U.S. shale oil output would record its first monthly decline in more than four years and on tensions in Yemen, where neighboring top oil exporter Saudi Arabia is embroiled in a civil war. [O/R]
Brent gained 1.7 percent to $58.93 a barrel while U.S. crude added 3.3 percent to $53.61.
U.S. Treasury yields fell after the retail sales data, though prices pared some gains towards the end of the session.
"It's lower than consensus," said Sean Murphy, a Treasuries trader at Societe Generale in New York about the retail sales number. "This is slightly helping to confirm that June might be a little bit too early" for a rate hike from the Federal Reserve.
The benchmark 10-year Treasury note rose 11/32 in price to yield 1.9002 percent, down from 1.939 percent late on Monday. The yield fell low as 1.855 percent earlier on Tuesday.
Spot gold dropped for a fifth session in six, down 0.5 percent at $1,192.16 an ounce.
Additional reporting by Daniel Bases, Ryan Vlastelica and Karen Brettell; Editing by James Dalgleish, Dan Grebler and Meredith Mazzilli