By Sinead Carew
(Reuters) – U.S. stocks opened higher Monday and the benchmark S&P 500 rebounded after three weeks of losses as the euro strengthened against the dollar, easing some concerns over the impact of a robust greenback on corporate earnings.
Investors have been cautious ahead of a U.S. Federal Reserve statement due on Wednesday, when they expect the central bank to give a clearer signal on the timing of its first interest rate hike in almost a decade.
The S&P 500 has fallen 2.7 percent in the last three weeks, including a 0.9 percent drop last week. The Dow lost 0.6 percent last week while the Nasdaq declined 1.1 percent.
A recovery in the euro was reassuring investors, said Nick Colas, chief market strategist at brokerage Convergex, in New York, as a rapidly rising U.S. dollar would pressure U.S. corporate earnings, especially for multinationals.
“It seems like the currency markets are helping U.S. equities this morning,” Colas said. “What markets are looking for is lower volatility.”
The euro found a foothold against the dollar on Monday, bolstered by concerns expressed by Italy’s central bank governor about the pace of its fall to 12-year lows, as the European Central Bank launched quantitative easing.
At 9:36 a.m., the Dow Jones industrial average (DJI) rose 117.84 points, or 0.66 percent, to 17,867.15, the S&P 500 (SPX) gained 13.21 points, or 0.64 percent, to 2,066.61 and the Nasdaq Composite (IXIC) added 25.14 points, or 0.52 percent, to 4,896.90.
Manufacturing activity in New York State slowed in March for a second month as the pace of new orders contracted to its weakest since November 2013, a New York Federal Reserve survey showed on Monday.
U.S. manufacturing output fell in February for a third month as automobile production tumbled, pointing to slower economic growth in the first quarter.
NAHB/Wells Fargo Housing Market Index data is scheduled for release at 10:00 a.m EDT (1400 GMT).
Salix Pharmaceuticals (O:SLXP) shares rose 1.8 percent to $172.48 after it agreed to an increased $173 per share offer from Valeant Pharmaceuticals (TO:VRX) (N:VRX). The deal includes $1 billion more in cash for Salix shareholders, ending a bidding war with Endo International Plc (O:ENDP), which said it was withdrawing its offer for Salix.
Valeant shares rose 1.7 percent to $200.86 while Endo shares rose 1.7 percent to $88.76.
Life Time Fitness (N:LTM) shares rose 5.2 percent to $70.69 after it said it would be acquired for more than $4 billion.
A. Schulman (O:SHLM) shares rose 10.7 percent to $46.55 after it announced an agreement to buy privately held specialty engineered plastics company Citadel in a deal valued at $800 million.
Advancing issues outnumbered declining ones on the NYSE by 1,971 to 722, for a 2.73-to-1 ratio; on the Nasdaq, 1,518 issues rose and 710 fell for a 2.14-to-1 ratio.
The benchmark S&P 500 index was posting 24 new 52-week highs and 7 new lows; the Nasdaq Composite was recording 60 new highs and 14 new lows.
Sources: reuters.com
