March 16, 2015 / 12:32 AM / in 3 years

Stocks up broadly; U.S. helped by dollar weakness

Traders work on the floor of the New York Stock Exchange shortly after the opening bell in New York March 16, 2015. REUTERS/Lucas Jackson

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.

The pan-European FTSEurofirst 300 index .FTEU3 gained 1 percent, while Germany’s DAX .GDAXI rose 2.2 percent to a record high of 12,167.72 before easing slightly. The MSCI International ACWI Price Index .MIWD00000PUS was up 1 percent.

The Dow Jones industrial average .DJI rose 228.11 points, or 1.29 percent, to 17,977.42, the S&P 500 .SPX gained 27.79 points, or 1.35 percent, to 2,081.19, and the Nasdaq Composite .IXIC added 57.75 points, or 1.19 percent, to 4,929.51.

The benchmark 10-year U.S. Treasury note US10YT=RR was up 9/32, the yield at 2.0770 percent.

Investors were looking ahead to the Fed’s policy decision on Wednesday.

“You’re going to have a thin market that’s pushed around pretty easily” ahead of the Fed’s commentary, said Joseph Benanti, managing director at Rosenblatt Securities in New York. Monday’s rally is “just a little bit of relief from last week’s sell-off.”

Many investors expect the Fed to remove its pledge to remain “patient” about raising rates for the first time since 2006. Economists polled by Reuters split almost evenly on whether a rate increase will come in June or later in the year.

U.S. crude CLc1 dropped 2.4 percent to $43.76 per barrel on expectations of oversupply. The International Energy Agency said on Friday a global glut of oil is growing and U.S. production shows no sign of slowing. Brent LCOc1 was down 2.4 percent at $53.38.

Gold XAU= fell 0.4 percent, the 10th decline in the past 11 sessions. Silver XAG= rose 0.4 percent while copper CMCU3 dipped 0.2 percent.

Editing by Leslie Adler

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