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1st LD Writethru: U.S. stocks rebound strongly as dollar falls

Xinhua, March 17, 2015 Adjust font size:

U.S. stocks surged Monday, as investors focused on weakness in the U.S. dollar ahead of Wednesday's key Federal Reserve meeting.

The Dow Jones Industrial Average gained 228.11 points, or 1.29 percent, to 17,977.42. The S&P 500 jumped 27.79 points, or 1.35 percent, to 2,081.19. The Nasdaq Composite Index added 57.75 points, or 1.19 percent, to 4,929.51.

Wall Street offered a favorable reaction to the U.S. dollar's decline. The dollar index, which measures the greenback against six major peers, was down 0.72 percent at 99.610 in late trading Monday.

The dollar renewed its rally on Friday, as the euro to dollar rate dropped to the lowest level since January 2003 amid monetary policy divergence and rising concerns over Greece.

Investors were eagerly awaiting the Fed statement due on Wednesday, when the central bank is expected to give a hint on the timing of an interest rate hike. The Federal Open Market Committee will hold its March meeting over the next two days.

Adding positive sentiment to the market, overseas stock markets rallied broadly on Monday. European shares ended higher as investors continued embracing the quantitative easing program by the European Central Bank.

Chinese Shanghai Composite Index soared to the highest level in five and a half years on Monday after Premier Li Keqiang said China could turn to policy tools to aid economic growth.

Li said at a press conference after the conclusion of China's annual parliamentary session on Sunday that the government still has policy tools at its disposal to bolster growth despite a slight economic slowdown.

On the economic front, industrial production increased 0.1 percent in February, missing market consensus of 0.3 percent, the Fed reported Monday. In February, manufacturing output moved down 0.2 percent, its third consecutive monthly decline.

"After a solid four-year run, a port slowdown and strong dollar appear to be weighing on the manufacturing sector. ISM (the Institute for Supply Management) manufacturing, auto sales, factory orders, and retail sales were all weaker-than-expected this month; adding industrial production to the list shows the recent weakness is widespread," said Jay Morelock, an economist at FTN Financial, in a note.

U.S. stocks equities notched their third weekly loss in a row last week, as the dollar surged to multiyear highs. Endite