The Nasdaq posted its highest close in 15 years on Friday and had a weekly gain of 3.2 per cent.
Riskier assets like equities had a strong week in general, largely driven by the Federal Reserve’s policy statement on Wednesday, which struck a more dovish tone than investors had expected. The Fed appeared to argue against an interest rate hike in June.
The US dollar index is up more than 20 per cent since mid-2014. The dollar’s strength for some time buoyed US stocks because it served as evidence of a strengthening economy, but lately there have been concerns of the impact it could have on the profits of US multinational companies.
US crude futures had their first weekly advance of the past five, and the S&P 500 snapped a three-week losing streak on Friday. The euro posted its biggest weekly jump against the dollar in more than three years, while the US dollar index suffered its biggest weekly drop since 2011.
The dollar index, which measures the greenback against a basket of currencies, fell 1.37 per cent, its biggest one-day decline since September 2013. The euro rose 1.4 per cent, to $ 1.0811, and the yen rose 0.61 per cent against the dollar.
“This is just some counter-trend correction in the dollar and is transitory,” said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.
Wall Street stocks surged, with the Dow and the S&P 500 both gaining almost 1 per cent on Friday. For the week, the Dow rose 2.1 per cent and the S&P rose 2.7 per cent.
MSCI’s all-country world index of equity performance in 46 countries rose 1.3 per cent.
The Dow Jones industrial average rose 168.36 points, or 0.94 per cent, to 18,127.39, the S&P 500 gained 18.82 points, or 0.9 per cent, to 2,108.09 and the Nasdaq Composite added 34.04 points, or 0.68 per cent, to 5,026.42.
“The Federal Reserve’s created a situation where there’s very little alternative to equities, so the path of least resistance for stocks will be up for a period of time,” said Robert Lutts, president, chief investment officer at Cabot Money Management in Salem, Massachusetts.
Shares of Nike Inc, the world’s largest sportswear maker and a Dow component, jumped 3.7 per cent to $ 101.98 a day after reporting strong quarterly results, though it warned about the impact of the dollar on the current quarter.
The Nasdaq Biotech Index rose 0.5 per cent, powered by a 9.8 per cent gain in Biogen Idec after the company announced promising results of an early-stage study of its drug to treat Alzheimer’s.
European equities closed higher. The FTSEurofirst 300 index posted its highest close since mid-2007, finishing up 0.8 per cent at 1,610.93. Greek equities rose 2.9 per cent after Greek Prime Minister Alexis Tsipras assured European Union creditors his coalition would soon present economic reforms to unlock cash to stave off bankruptcy. In addition, the recent weakness of the euro was seen as boosting the region’s economy and corporate earnings.