US stocks opened higher to recover from extended losses as a weaker dollar reassured investors after concern over the impact of a stronger dollar on multinational earnings.
The Standard & Poor’s 500 index rose 19 points 0r 1% to 2070 by around 10.00 am eastern to rebound from three straight weeks of losses.
The S&P has fallen more than 2.7% in the last three weeks including a 0.9% drop last week leaving it barely even for the year.
“It’s just a little bit of relief from last week’s selloff,” Joseph Benanti, managing director, sales and trading of Rosenblatt Securities in New York told Reuters.
“You’re going to have a thin market that’s pushed around pretty easily,”
The Dow Jones Industrial Average rose by 163 points or 0.9% to 17,911. The Dow Jones fell 0.6% last week.
The NASDAQ Composite advanced 38 points or 0.9% to 4909 to recover from its 1.1% slip last week.
Investors attributed the strength of the market on a slight decline in the US dollar and gains in European stocks as they continue to look forward to the Federal Reserve’s policy meeting slated for Tuesday.
While the greenback slipped on Monday, it had shot nearly 13% in 2015 catching investors off guard and leading to fluctuations on Wall Street.
“In the short run, we’ve become very sensitive to moves in the dollar,” Gina Martin Adams, equity strategist at Wells Fargo Securities, told the Wall Street Journal
“Equities simply do not like uncertainty and the extent of the dollar move so far this year has infused a degree of uncertainty into the earnings stream,” she said.
The recent market unpredictability has seen investors remain cautious ahead of the Federal Reserve’s statement on Wednesday expected to clarify on the timing of the Fed Reserve’s first interest hike since 2008.
To contact the reporter of this story; Jonathan Millet at firstname.lastname@example.org