Wall St bounces, led by utilities, as dollar drop eases earnings worry

By Caroline Valetkevitch

REUTERS - U.S. stocks rose on Monday, with utilities leading a rebound on the S&P after three weeks of losses, as a decline in the U.S. dollar against the euro eased some worries over how a robust greenback might erode the earnings of multinationals.

The dollar fell across the board Monday on investor concerns its recent strength could prompt the Federal Reserve to be more cautious about raising interest rates this year.

The S&P utilities index, which tends to do well in a low interest rate environment, was up 2.1 percent, leading the day's gains.

The next statement from the Fed is due on Wednesday, when investors expect the central bank to give a clearer signal on the timing of its first interest rate hike in almost a decade.

"It's just a little bit of relief from last week's selloff," said Joseph Benanti, managing director, sales and trading of Rosenblatt Securities in New York.

The S&P healthcare sector was up 1.9 percent, helped by a 3.6 percent price increase in shares of Amgen to $159.73, following promising data in studies of a new class of cholesterol-reducing drugs.

Salix Pharmaceuticals shares rose 1.98 percent to $172.76 after it agreed to an increased $173 per share offer from Valeant Pharmaceuticals.

At 1:19 p.m., the Dow Jones industrial average rose 176.44 points, or 0.99 percent, to 17,925.75, the S&P 500 gained 19.9 points, or 0.97 percent, to 2,073.3 and the Nasdaq Composite added 38.22 points, or 0.78 percent, to 4,909.98.

The S&P 500 has fallen 2.7 percent in the last three weeks, including a 0.9 percent drop last week. The Dow lost 0.6 percent last week while the Nasdaq declined 1.1 percent.

Energy shares also rose despite further losses in oil prices. The S&P energy index was up 0.5 percent.

The biggest percentage decliner in the S&P 500 was Avon Products, which was down 5.5 percent at $7.29 after S&P Dow Jones Indices announced late Friday the stock would be moved out of the S&P 500.

Advancing issues outnumbered declining ones on the NYSE by 1,831 to 1,164, for a 1.57-to-1 ratio on the upside; on the Nasdaq, 1,442 issues rose and 1,236 fell for a 1.17-to-1 ratio favoring advancers.

The benchmark S&P 500 index was posting 50 new 52-week highs and 10 new lows; the Nasdaq Composite was recording 142 new highs and 50 new lows.

(Additional reporting by Sinead Carew; Editing by Bernadette Baum)