U.S. stocks stage late-day rally, dollar gains

By Herbert Lash

NEW YORK (BestGrowthStock) – World equities eased on Monday despite a late-day rally in U.S. stocks (Read more about the stock market today. ), on fears that a likely move by China to tighten credit may slow global growth, while the dollar gained on risk aversion.

Assets perceived as risky, such as stocks, crude oil and other commodities, retreated amid an array of questions about monetary policy, an unclear attempt to resolve Greece’s debt woes and how China will manage a looming bout of inflation.

“There’s potential for the China situation to end up working out in our favor, but right now, there’s no consensus on how this will play out in terms of currency or trade issues,” said Eric Kuby, chief investment officer at North Star Investment Management Corp in Chicago.

Oil prices fell nearly 2 percent to below $80 a barrel and copper slumped to its lowest in two weeks. But gold rose on dollar strength and weaker risk appetite.

MSCI’s all-country world stock index (.MIWD00000PUS: ) was off 0.52 percent.

Also weighing on investors were meetings scheduled this week by U.S. and Japanese central bank policymakers.

Whatever the asset class, investors found something to fret about.

U.S. stocks (Read more about the stock market today. ) rebounded a bit on a reversal in banking shares after Senate Banking Committee Chairman Christopher Dodd released a proposed financial regulation overhaul bill that investors said did not offer any surprises for the sector.

The Dow Jones industrial average (.DJI: ) closed up 17.46 points, or 0.16 percent, at 10,642.15. The Standard & Poor’s 500 Index (.SPX: ) rose 0.52 point, or 0.05 percent, to 1,150.51. The Nasdaq Composite Index (.IXIC: ) slipped 5.45 points, or 0.23 percent, to 2,362.21.

The euro fell (Read more about the trembling euro. ) against the dollar, weighed down by a lack of concrete progress on a financial aid package for debt-strapped Greece. The euro was down 0.6 percent at $1.3673, retreating from a four-week high just shy of $1.3800 on Friday.

“The Greek debt crisis will continue to hang over the euro like the Sword of Damocles,” said Chris Gaffney, vice president at EverBank World Markets in St. Louis.

Investors moved to the sidelines ahead of the Federal Reserve’s one-day policy meeting on Tuesday. The U.S. central bank is widely expected to stick to its near zero interest rate policy. The Bank of Japan will hold a policy meeting on Tuesday and Wednesday. Investors are keen to learn how attempts to ignite growth have fared.

Benchmark 10-year Treasury notes traded unchanged in price with a yield of 3.71 percent,

There was little market reaction after two reports showed U.S. industrial production braked sharply in February as severe winter storms slammed parts of the United States while manufacturing activity in New York state stalled this month.

The euro was down 0.7 percent on the day at $1.3663, retreating from a three-week high of $1.3796 on Friday.

The ICE Futures’ dollar index (Read more about the global trade. ) (.DXY: ) traded up 0.5 percent against a basket of currencies at 80.221.

U.S. crude for April delivery settled $1.44 lower at $79.80 per barrel, its lowest close in nearly two weeks.

London Brent crude closed down $1.50 at $77.89 a barrel.

U.S. gold futures for April delivery on the COMEX division of the New York Mercantile Exchange settled up $3.70 at $1,105.40 an ounce.

Stock Analysis

(Reporting by Wanfeng Zhou, Edward McAllister and Richard Leong in New York; Chris Baldwin, Jan Harvey and Rebekah Curtis in London; Writing by Herbert Lash; Editing by Dan Grebler)

U.S. stocks (Read more about the stock market today. ) stage late-day rally, dollar gains