US stocks rise as dollar weakens

US stocks rose with equities around the world, while the dollar weakened as tepid manufacturing growth from China to Europe boosted the prospects for added stimulus in those regions.

The Standard and Poor’s 500 Index added to its second monthly gain, while a rally in UK banks kept an index of European shares near a three-month high.

The dollar slipped from a seven-month high versus the euro on speculation the Federal Reserve’s first rate increase in nearly a decade has been priced in.

Ten-year Treasury notes erased earlier losses, while copper led gains among commodities. Global equities are getting a jump on what has been the strongest month for stocks since 1988, as investors prepare for the European Central Bank’s policy decision and US jobs data later this week.

Data on Tuesday showed a private reading on Chinese manufacturing unexpectedly advanced while factory growth in the euro area accelerated, though not by enough to alter perceptions on the prospect for added stimulus.

Manufacturing in the US unexpectedly contracted in November. “There’s a bit more tolerance for risk right now because indices are flat and managers have to show return somewhere – there’s only four weeks to go, and they’re not doing it buying bonds,” Ron Anari, senior vice president of trading at ICAP said.

“The Fed is going to hike at some point and it might as well be now. The equity markets have got it pretty much absorbed.”

- Bloomberg