U.S. stocks closed sharply higher Monday, with the Dow Jones Industrial Average soaring more than 200 points, as the U.S. dollar rally paused ahead of the Federal Reserve’s two-day policy meeting. The Federal Open Market Committee is scheduled to kick off its March policy meeting Tuesday, followed by a statement from Fed Chair Janet Yellen on Wednesday.
All three major indexes managed to gain more than 1 percent Monday, despite a sharp decline in oil prices.
The Dow (INDEXDJX:.DJI), which measures the share prices of 30 large industrial companies, soared 228.11 points, or 1.29 percent, to close at 17,977.42. The S&P 500 stock index (INDEXNASDAQ:.IXIC) added 27.79 points, or 1.35 percent, to end at 2,081.19. The Nasdaq composite (INDEXSP:.INX) gained 57.75 points, or 1.19 percent, to finish at 4,929.51.
Ahead on the economic calendar, economists will sort through a series of data points Tuesday that will reveal the overall health of the housing sector, including housing starts and building permits for February. Data last month painted a mixed picture for groundbreaking on new homes in 2015 after U.S. housing starts fell 2 percent in January from a month earlier, to a seasonally adjusted annual rate of 1.065 million, the Commerce Department said Feb. 18. Building permits, a bellwether for construction activity in the coming months, fell 0.7 percent in January, to 1.05 million units.
Monday’s rally pushed the Dow and S&P 500 back into positive territory for the year following last week’s volatility. For the year, the blue-chip Dow is up 150 points, or 0.84 percent, and the S&P 500 has risen 22 points, or just over 1 percent. Meanwhile, the tech-heavy Nasdaq composite has gained 193 points, or more than 4 percent.
U.S. stocks rose in early trading Monday as the U.S. dollar index eased nearly 1 percent. The index gained nearly 3 percent in the last week as the euro tumbled to a 12-year low against the greenback. The greenback's gains weighed on investor sentiment recently as a prolonged period of dollar strengthening would hurt U.S. multinationals once they convert foreign revenue to dollars.
Oil prices extended losses Monday and tumbled to a six-year low on renewed fears of oversupply. The Organization of the Petroleum Exporting Countries (OPEC) warned low oil prices could affect U.S. oil output by the end of the year. Following the report, West Texas Intermediate crude, the benchmark for U.S. oil prices, lost 96 cents to close at $43.88 a barrel, for April 15 delivery on the New York Mercantile Exchange. Brent crude, the benchmark for global oil prices, hit a six-week low of $52.50 in intraday trading and then dropped more than 2 percent, to close just above $53 a barrel, for April 15 delivery on the London ICE Futures Exchange.