NEW YORK: US stocks rose on Friday, with the Dow Jones industrial average headed for its best month since December, and the dollar hit 3-year lows on the Federal Reserve's pledge to keep ultra-low interest rates.
For global markets, it was one of the most momentous weeks of the year as the Fed's word opened the floodgates for a rush of new money into equities, commodities and almost every asset but the dollar.
The MSCI index of world equities, rose 0.3 percent on Friday. The index is up about 5 percent over the past two weeks.
Benchmark crude oil prices climbed above $125 per barrel in London, as the tumbling dollar and violence in North Africa and the Middle East outweighed concerns about slowing US economic growth. US crude rose as high as $113.55 a barrel, near the 31-month high reached on Thursday.
US gold futures soared to a third consecutive record high, hitting $1,553.70 an ounce. Spot gold extended gains to a record high at $1,551.20 an ounce.
Robust US corporate earnings, ample liquidity from the Federal Reserve, and the prospect of ultra-low interest rates for the rest of the year have driven stock prices higher, pushing the Nasdaq Composite Index up to a 10-year peak and sending the S&P 500 index up over 8.0 percent this year.
Shares of heavy machinery maker Caterpillar Inc climbed 2.5 percent to $115.48 after reporting a fivefold increase in quarterly profit and raising its full-year forecast. Drug maker Merck & Co Inc rose 0.6 percent to $35.99 and major oil company Chevron added 0.4 percent to $109.21, after both reported earnings that exceeded Wall Street's expectations.
But after a strong April, equities will head into one of their traditionally weakest months of the year, according to the Stock Trader's Almanac.
"Once we get past (earnings), it is going to be awful tough," said Peter Jankovskis, co-chief investment officer of OakBrook Investments in Lisle, Illinois,
"As the memory of strong earnings begins to fade, we probably will go back into a sideways market."
The Dow Jones industrial average was up 62.21 points, or 0.49 percent, at 12,825.52 -- not far below its session high at 12,832.83. The Standard & Poor's 500 Index was up 3.03 points, or 0.22 percent, at 1,363.51. The Nasdaq Composite Index was up 1.70 points, or 0.06 percent, at 2,874.23.
Earlier, the S&P 500 rose as high intraday as 1,363.87.
European shares rose modestly following a six-session winning streak, with volumes crimped by a holiday in Britain for the royal wedding. The FTSEurofirst 300 index of top European shares gained 0.3 percent to end at 1,156.81.
The 19-commodity Reuters-Jefferies CRB index, a broad indicator of the commodity market, is up 10 percent for the year, making it the world's best-performing asset group. Early Friday afternoon, the CRB was up 0.9 percent at 369.46 -- just a touch below a fresh 52-week intraday high at 369.58.
The 19-commodity Reuters-Jefferies CRB index, a broad indicator of the commodity market, is up 10 percent for the year, making it the world's best-performing asset group. Early Friday afternoon, the CRB was up 0.9 percent at 369.46 -- just a touch below a fresh 52-week intraday high at 369.58.
April's strength in equity and commodity markets came almost entirely at the dollar's expense after Standard & Poor's revised downward its outlook for the United States' stellar triple-A sovereign credit rating.
The dollar's slide was exacerbated by the Federal Reserve's statement on Wednesday that it intends to keep interest rates at historic lows to help bolster the tepid US economic recovery.
Evidence to support the Fed's point of view came on Thursday from economic data showing US gross domestic product grew less than expected in the first quarter of 2011 and initial weekly jobless claims rose more than forecast.
"It's still a story of general dollar weakness," said Richard Wiltshire, chief FX broker of ETX Capital. "Markets are pretty thin and there's not a lot of depth to them."
The US Dollar Index, which measures the dollar's performance against a basket of major currencies, fell as low as 72.834, the lowest since 2008.
The euro neared a 17-month high against the greenback, trading at $1.4835 in early afternoon in New York.
Inflation in the 17-nation euro-zone bloc edged up 2.8 percent in April compared with a year ago -- well above the 2.0 percent target ceiling of the European Central Bank. Earlier this month, the ECB raised interest rates for the first time in two years. The latest inflation numbers raised prospects for another ECB interest-rate increase soon.
The benchmark US Treasury 10-year note was flat in price in light volume, yielding 3.31 percent as it consolidated gains made this week on softer economic data and prospects for accommodative monetary policy in the months ahead.
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