Dollar’s fall sends stocks soaring
A sharp rally in the dollar relented Thursday, helping to push the stock market to its best day in five weeks.
The U.S. currency dropped for the first day in nine against the euro after a weak retail sales report raised questions about the strength of the economy.
A jump in the dollar since the start of the month has pushed stocks back from record levels. Investors are worried that the stronger U.S. currency could crimp corporate earnings by hurting overseas sales. About half of the revenue generated by companies in the Standard & Poor’s 500 index comes from overseas.
Financial stocks were among the biggest gainers after a number of banks got approval from the Federal Reserve to raise dividends and buy back shares. Intel was one of the day’s biggest losers after the company cut its revenue forecast for the first quarter.
The Standard & Poor’s 500 index climbed 25.71 points, or 1.3%, to 2,065.95. It was the best performance for the index since Feb. 3.
The Dow Jones industrial gained 259.83 points, or 1.5%, to 17,895.22. The Nasdaq composite climbed 43.55 points, or 0.9%, to 4,893.29.
Stocks have slumped since the start of the month on speculation that the Federal Reserve could raise its benchmark interest rate in June as hiring continues to improve.
Policymakers have held their main rate close to zero for more than six years to help the economy recover from the Great Recession.
Thursday’s slide in the dollar and the positive news on the banks more than outweighed a government report that showed retail sales were sluggish in February. The ongoing weakness is raising concerns about the strength of the economy.
Intel was the biggest decliner in the S&P 500.
Intel cut its revenue forecast for the first quarter to a range of $12.5 billion to $13.1 billion. The company cited weak demand for business desktop PCs and a strong dollar, which diminished revenue from overseas sales. Intel’s stock slumped $1.53, or 4.7%, to $30.80.
Morgan Stanley was the biggest gainer in the index.