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By Caroline Valetkevitch
NEW YORK (Reuters) - The U.S. dollar slumped to a more than three-year low against the euro on Friday, extending recent losses on expectations European Central Bank policymakers are preparing to reduce their stimulus, while a key global stock index was on track for an eighth week of gains.
The euro's rise weighed on the dollar index <.DXY>, which measures the greenback against six rival currencies. The index was down 0.94 percent, after slipping to a four-month low of 90.954.
The dollar index was down 1.23 percent for the year, its worst performance over the first nine trading days since 2010, according to Reuters data.
The S&P financial index <.SPSY> was up 0.6 percent. While tax-related costs are expected to weigh on banks' earnings, they are expected to benefit in the long run from a lower tax burden.
"The fact all the big money centre banks beat on the bottom line is a good omen for the rest of the earnings season," said William Lynch, director of investments at Hinsdale Associates, in Hinsdale, Illinois.
The Dow Jones Industrial Average <.DJI> rose 185.41 points, or 0.72 percent, to 25,760.14, the S&P 500 <.SPX> gained 15.39 points, or 0.56 percent, to 2,782.95 and the Nasdaq Composite <.IXIC> added 40.17 points, or 0.56 percent, to 7,251.95.
The pan-European FTSEurofirst 300 index <.FTEU3> rose 0.23 percent and MSCI's gauge of stocks across the globe <.MIWD00000PUS> gained 0.72 percent.
A robust U.S. inflation report boosted Treasury yields.
The two-year yield
In commodities, oil prices rose for a sixth day after Russia's oil minister said that global crude supplies were "not balanced yet," alleviating market concerns about a wind-down of the OPEC-led deal to reduce production.