US stocks open higher, led by gains for financial companies; dollar weakens against euro

Energy Associated Press

U.S. stocks opened higher on Thursday, led by gains in financial stocks after a number of banks got approval from the Federal Reserve to raise interest rates and buy back stock.

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Stocks were also higher as the dollar weakened against the euro for the first day in the past nine.

KEEPING SCORE: The Standard & Poor's 500 index climbed 17 points, or 0.8 percent, to 2,057 as of 10:02 a.m. Eastern. The Dow Jones industrial average jumped 165 points, or 1 percent, to 17,800. The Nasdaq composite gained 20 points, or 0.4 percent, to 4,870.

U.S. JITTERS: U.S. stocks have slumped in March on speculation that the Federal Reserve could raise its benchmark interest rate as soon as June. The Fed has held its benchmark lending rate close to zero since 2008 to help the economy recover from the financial crisis and the deep recession that followed. Against that backdrop, stocks have rallied to record levels.

SLUGGISH SALES: Retail sales remain sluggish despite a big drop in gas prices last year. U.S. retail sales fell in February, as auto purchases dropped by the most in more than a year and Americans spent less at restaurants and home improvement stores. Retail sales fell 0.6 percent last month after a 0.8 percent decline in January, the Commerce Department said Thursday. It was the third straight retreat.

EUROPES'S DAY: In Europe, Germany's DAX fell 0.2 percent while the CAC-40 in France was flat. Britain's FTSE 100 was up 1 percent.

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NO STRESS: Financial stocks were among the biggest gainers after the Federal Reserve approved plans by major U.S. banks to raise dividends and buy back shares. The announcements follow the Fed's "stress tests" that assess whether lenders have adequate reserves to withstand a major economic downturn.

Citigroup rose $2.08, or 4 percent, to $54.41 after it said late Wednesday that it would buy back $7.8 billion in stock and raise its quarterly dividend to 5 cents from 1 cent. Morgan Stanley gained $1.42, or 4.1 percent, to $36.37 after announcing a $3.1 billion stock buyback and raising its dividend to 15 cents from 10 cents.

CURRENCIES: While the Fed appears to be edging closer to raising rates, the European Central Bank and the Bank of Japan are still trying to stimulate their economies. The divergent policies are pushing the dollar higher against the euro and Japanese yen. While the resurgent dollar is good news for U.S. consumers vacationing in Europe, it acts as a drag on profits for global companies that rely on overseas sales for a large portion of their revenue.

On Thursday, the euro recovered some ground Thursday, trading 0.5 percent higher at $1.06 The dollar fell 0.3 percent against the Japanese currency to 121.15 yen.

BONDS: U.S. government bond prices rose. The yield on the benchmark 10-year Treasury note fell to 2.08 percent from 2.11 percent late Wednesday.

ENERGY: Benchmark U.S. crude oil slipped 33 cents to $47.83 a barrel on the New York Mercantile Exchange. Brent crude, a benchmark for international oils used by many U.S. refineries, rose 43 cents to $58.31 a barrel in London.