Cautious Yellen drives world stocks near 2016 peaks

An index of global stocks on Wednesday charged to its highest point since the start of the year, while the dollar weakened, as easing concerns about rising interest rates led investors into riskier assets.

Oil prices climbed, as commodities denominated in dollars became more attractive to users of other currencies. US Treasury prices fell with benchmark yields rising from four-week lows amid selling in safe-haven bonds.

Federal Reserve Chair Janet Yellen said on Tuesday the US central bank should proceed cautiously as it looks to raise interest rates, pushing back on a handful of her colleagues who have suggested another move may be just around the corner.

The Dow Jones industrial average was up 101.98 points, or 0.58 per cent, at 17,735.09, the S&P 500 gained 10.18 points, or 0.5 per cent, at 2,065.19 and the Nasdaq Composite added 20.28 points, or 0.42 per cent, at 4,866.91. The pan-European FTSEurofirst 300 index advanced 1.3 per cent. MSCI's index of world shares gained 1.4 per cent, putting it into positive territory for 2016. The dollar had hit its highest level in about two weeks against a basket of major currencies at the start of the week, boosted by a series of hawkish comments from Fed officials. But the greenback receded after Yellen's comments.

The dollar fell another 0.4 percent on Wednesday. It is down about 4 per cent this year and on track to post its biggest quarterly percentage dip in five years. The euro rose 0.5 per cent against the dollar. US crude prices rose 1.1 per cent to $38.71 a barrel, while benchmark Brent climbed 1.3 per cent to $39.63 a barrel.