NEW YORK (Reuters) - A weakening U.S. dollar and optimism that commodity prices will steady boosted global stock markets on Monday, pushing down U.S. Treasury prices.
Wall Street climbed as investors anticipated that a feebler dollar will boost U.S. exports by making them cheaper overseas, analysts said, potentially buoying corporate earnings and profits.
“I think we are at a turning point” in sentiment, said Bernard Baumohl, managing director and chief global economist at the Economic Outlook Group in Princeton, New Jersey.
Baumohl expects to see improved earnings and sales starting in the second quarter, and some investors are already trading on that optimism.
The Dow Jones industrial average rose 117.52 points, or 0.66 percent, to 17,891.16, the S&P 500 gained 16.13 points, or 0.78 percent, to 2,081.43 and the Nasdaq Composite added 42.24 points, or 0.88 percent, to 4,817.59.
All 10 of the major S&P sectors rose, led by consumer discretionary and financial stocks.
MSCI’s measure of world stock indexes rose 0.2 percent in afternoon trading, overcoming losses in Japan and China overnight.
Japan’s Nikkei index fell 3.1 percent, nearing a three-week low, as the yen’s continued strength weighed on the profit outlook for exporters.
Worries over Japanese policymakers' inability to stem the yen's rise had pushed the dollar to an 18-month low of 106.14 yen JPY= in early Asian trading. It later bounced as high as 106.81 yen before easing to 106.45 yen, up 0.1 percent on the day.
Finance Minister Taro Aso was quoted in Japanese media over the weekend as saying he viewed the yen’s strength as “extremely concerning,” stoking speculation the Bank of Japan might intervene to stem the currency’s rise.
Bank of Japan Governor Haruhiko Kuroda said on Monday that the yen’s recent rise could hurt the world’s No. 3 economy.
The U.S. dollar fell 0.51 percent against a basket of six major rivals. The dollar index earlier dropped to 92.544, its lowest since January 2015.
U.S. Treasury yields rose as investors favored stocks over safe-haven government debt. Benchmark 10-year notes fell 13/32 in price to yield 1.87 percent, up from 1.82 percent on Friday.
Although oil prices fell on Monday, prices have in recent weeks been on the advance and stabilizing.
Brent crude futures fell 3.1 percent and U.S. crude futures fell 2.2 percent as data showing higher Middle East oil production and record hedge fund buying sparked profit-taking on last month’s outsized rally. Oil markets rose 20 percent or more in April, with Brent having its best month in seven years.
Additional reporting by Patrick Graham in London; Editing by Nick Zieminski, Bernadette Baum and Dan Grebler