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* US stocks up on earnings, Dow sees best month since Dec
* U.S. dollar index <.DXY> at 3-year low
* Euro-zone inflation above expectations, bolstering euro
* Oil near 31-year peak, gold at all-time high
(Adds Caterpillar, Merck earnings and analyst's quote)
By Barani Krishnan
NEW YORK, April 29 (Reuters) - U.S. 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 <.MIWD00000PUS>, rose 0.3
percent on Friday. The index is up about 5 percent over the
past two weeks.
Benchmark crude oil prices <LCOc1> climbed above $125 per
barrel in London, as the tumbling dollar and violence in
North Africa and the Middle East outweighed concerns about
slowing U.S. economic growth. [] U.S. crude <CLc1> rose as
high as $113.55 a barrel, near the 31-month high reached on
Thursday.
U.S. gold futures <GCM1> soared to a third consecutive
record high, hitting $1,553.70 an ounce. [] Spot gold
<XAU=> extended gains to a record high at $1,551.20 an ounce.
Robust U.S. 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 <CAT.N>
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 <MRK.N> rose 0.6 percent
to $35.99 and major oil company Chevron <CVX.N> 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
<.SPX> 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 <.CRB>, 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 U.S.
economic recovery.
Evidence to support the Fed's point of view came on
Thursday from economic data showing U.S. 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 U.S. Dollar Index <.DXY>, which measures the dollar's
performance against a basket of major currencies, fell as low
as 72.834, the lowest since 2008.
The euro <EUR=> 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 U.S. Treasury 10-year note <US10YT=RR> 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. []
* For Reuters Global Investing Blog, click on
http://blogs.reuters.com/globalinvesting
* For the MacroScope Blog, click on
http://blogs.reuters.com/macroscope
* For Hedge Fund Blog, click on
http://blogs.reuters.com/hedgehub
(Reporting and writing by Barani Krishnan; Additional
reporting by Mike Peacock, Jessica Mortimer, Atul Prakash and
William James in London; Ian Chua in Sydney; and Umesh Desai
and Jongwoo Cheon in Singapore; Editing by Jan Paschal )
