NEW YORK (Reuters) - The U.S. dollar fell for a fourth straight session on Wednesday on waning expectations of a near-term Federal Reserve interest rate hike, while an index of world equity markets advanced to a six-week high.
Commodities rallied on the weaker dollar, and crude oil futures hit fresh 2016 highs on persistent worries related to supply outages.
The dollar hit a five-week low against a basket of currencies as traders reduced bets of an imminent U.S. rate increase following a weak jobs report and perceived dovish comments from the Federal Reserve Chair Janet Yellen. The dollar index .DXY was last down 0.22 percent to 93.619.
The MSCI world equity index .MIWD00000PUS, which tracks shares in 45 countries, rose for a fifth straight session and was up 0.31 percent. Shares have rallied on buoyant crude oil prices and an upbeat assessment of the economy by Fed Chair Janet Yellen on Monday.
"A positive move develops its own momentum," said Bruce McCain, chief investment strategist at Key Private Bank in Cleveland.
"As we saw with the clearly disappointing jobs report, even some bad news is not enough to shake off the positive feeling that has been driving prices higher," he said.
U.S. stocks rose as declines in the dollar lifted some commodity-related shares and boosted the outlook for multinationals. The S&P 500 .SPX closed less than 1 percent shy of its all-time high of 2134.72 and the Dow Jones industrial average .DJI ended above 18,000 for the first time since April.
"I think the good news for the market is that the sentiment is still far from euphoric. So if you have data just chug along and no major shocks, you could potentially have the market gap higher," said Marc Pouey, U.S. Equity and Quantitative Strategist at Bank of America in New York.
The Dow .DJI rose 66.77 points, or 0.37 percent, to close at 18,005.05, the S&P 500 .SPX gained 6.99 points, or 0.33 percent, to end at 2,119.12 and the Nasdaq Composite .IXIC added 12.89 points, or 0.26 percent, to finish at 4,974.64.
Europe's broad FTSEurofirst 300 index .FTEU3 snapped two days of gains to close down 0.54 percent at 1,352.91. A drop in Italian bank UniCredit (CRDI.MI) and Austrian bank Erste (ERST.VI) knocked financial shares.
Crude futures stayed above the psychologically important $50 a barrel level on worries about sabotage of oil facilities in Nigeria.
Prices pared gains briefly as supply glut concerns resurfaced after U.S. data showed a surprise build in gasoline inventories.
Energy Information Administration data showed U.S. crude oil inventories fell for the third consecutive week but gasoline and distillate stockpiles rose as refiners ramped up output.
Brent crude LCOc1 settled up $1.07, or 2.08 percent at $52.51 a barrel, while U.S. crude CLc1 settled up 87 cents, or 1.73 percent, at $51.23.
In the bond market, U.S. 10-year Treasury yields fell after the government sold $20 billion in 10-year notes to strong demand, the second tranche of a total $56 billion in coupon-bearing supply this week.
Investment funds, foreign central banks and other indirect bidders purchased a record share of the 10-year government debt issue at the auction, on intense overseas demand for higher-yielding U.S. bonds, Treasury data showed.
Benchmark 10-year notes US10YT=RR were up 3/32 in price to yield 1.7022 percent, down from 1.713 percent late on Tuesday.
The weaker dollar boosted copper and gold prices, while aluminium climbed to its highest level in a month.
Spot gold XAU= rose to a three-week high and was up 1.49 percent to $1,261.91 an ounce.
Additional reporting by Karen Brettell in New York; Editing by Nick Zieminski and Meredith Mazzilli