Dollar strength hurts stocks, oil bounces off lows

Thu Mar 24, 2016 4:37pm EDT
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By Chuck Mikolajczak

NEW YORK (Reuters) - Global equity markets declined on Thursday and the dollar added to a recent string of gains after another U.S. Federal Reserve official talked of higher U.S. interest rates before long.

The dollar .DXY rose for a fifth day, adding 0.07 percent to 96.116 against a basket of major currencies. The streak is the longest for the dollar in nearly a year and puts the greenback on track for its first weekly rise in a month.

The gains were further supported by remarks of St. Louis Fed President James Bullard, who joined a chorus of officials who have recently highlighted the chance of at least two rate increases this year, with the first perhaps as soon as April.

The dollar's strength weighed on oil prices, although they partly rebounded from session lows after a drop in the U.S. oil rig count eased some concerns stemming from recent data showing record high U.S. stockpiles.

"You have to somehow break out of the cycle, when you are so dependent on everything the Fed does or everything a central banker says. That kind of locks up the market," said Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey.

"It is really frustrating we are stuck with these guys, and every time they say something the market reacts."

The rally in crude prices to above $40 a barrel had been a big factor in stock market advances in recent weeks, helping the benchmark S&P 500 .SPX rise more than 12 percent from a Feb. 11 low.

The Dow Jones industrial average .DJI rose 13.35 points, or 0.08 percent, to 17,515.94, the S&P 500 .SPX dropped 0.74 points, or 0.04 percent, to 2,035.97 and the Nasdaq Composite .IXIC added 4.64 points, or 0.1 percent, to 4,773.51.   Continued...

Traders work on the floor of the New York Stock Exchange (NYSE) March 16, 2016. REUTERS/Brendan McDermid