Wall St. bounces as dollar drops, Fed worries ease

Several negative reports including but not limited to a small drawdown in manufacturing and modest decline in consumer confidence was greeted once again as great news and sent the Dow soaring 228 points, all because these bad reports gave the markets increased confidence that the Fed would not on Wednesday announce an interest rate hike after all.  However, expectations are now quite strong that the Fed will change its policy language this week and, for the first time in many years, eliminate the word "patient" from their statement on Wednesday.  Of course, the Fed has made zero gestures to indicate that anything along that line will happen and, as was pointed out by Barry Ritholtz in his Saturday column, the Fed actually has a very long history of taking a "patient" approach to its policies.  However, if it does happen, it will likely send the market into a tailspin even if there is no rate hike announcement since the elimination of the word "patient" will be taken that hikes will not only come sooner than later but will probably not be in small increments.  So on Wednesday (or Thursday) we will have either euphoria or panic.  This will last for a few days and then we will once again be back to business as usual with everyone sitting on pins and needles now speculating on the Fed's meeting in April.  Volume was average at 6.2 billion shares.

Wall St. bounces as dollar drops, Fed worries ease

BY CAROLINE VALETKEVITCH

Mon Mar 16, 2015 7:31pm EDT

DJ:     17,977.42  +228.11     NAS:   4,929.51  +57.75       S&P:      2,081.19  +27.79

(Reuters) - U.S. stocks rallied on Monday as the U.S. dollar eased back from its recent peak and worries eased about the timing of a Federal Reserve interest rate hike.

Recent dollar strength has increased expectations the Fed could be more cautious about raising rates this year.

The day's gains gave the S&P 500 its biggest percentage gain since Feb. 3, with the S&P utilities .SPLRCU, which tend to do well in a low interest rate environment, among the day's best-performing sectors. The utilities sector rose 1.7 percent.

The S&P healthcare sector .SPXHC led gains in the S&P 500. It jumped 2.2 percent, helped by a 5.7 percent price increase in shares of Amgen (AMGN.O) to $163.03, following promising data in studies of a new class of cholesterol-reducing drugs.

All eyes will be on the Fed's statement Wednesday, when investors hope the central bank will give a clearer signal on the timing of its first interest rate hike in almost a decade.

"It seems to me that interest rate expectations are driving the market right now," said Uri Landesman, president at Platinum Partners in New York. "Every day when they think it's going to start, they get nervous and sell them off. And every day they think it may be slower or not begin, then they take them up."

The day's decline in the dollar helped ease some worries over how a robust greenback might erode the earnings of multinationals.

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 Dow and S&P 500 had registered their third week of losses last week.

Energy shares also bounced, adding to gains late in the session despite further losses in oil prices. The S&P energy index .SPNY was up 1.4 percent, while U.S. crude oil CLc1 settled down 96 cents at $43.88 a barrel and earlier hit its lowest since March 2009.

Shares of Exxon Mobil (XOM.N) were up 1.1 percent at $84.76.

Salix Pharmaceuticals (SLXP.O) shares rose 2 percent to $172.75 after it agreed to an increased $173 per share offer from Valeant Pharmaceuticals (VRX.TO)(VRX.N). Valeant shares were up 2.5 percent at $202.34.

The biggest percentage decliner in the S&P 500 was Avon Products (AVP.N), which was down 5.7 percent at $7.28 after S&P Dow Jones Indices announced late Friday the stock would be moved out of the S&P 500 this month.

About 6.2 billion shares changed hands on U.S. exchanges, below the 6.6 billion average for the month to date, according to BATS Global Markets.

Advancing issues outnumbered declining ones on the NYSE by 1,980 to 1,083, for a 1.83-to-1 ratio; on the Nasdaq, 1,549 issues rose and 1,202 fell, for a 1.29-to-1 ratio favoring advancers.

The S&P 500 posted 56 new 52-week highs and 10 new lows; the Nasdaq Composite recorded 168 new highs and 64 new lows.