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New York - Major stock markets rose on Monday, with worries about the effect of high energy prices on US economic growth easing slightly, while the dollar hit a 3-1/2-month low against a basket of major currencies.
World equities measured by MSCI All-Country World Index added 0.6% after rising 1.1% on Friday. The global index is up 2.3% this month, on track for a third straight monthly rise.
Comments by James Bullard, president of the St. Louis Federal Reserve, that the US economy should do well in 2011 and that oil prices are not currently a drag on the recovery helped to boost US stocks.
"Bullard was right that oil prices won't put a crimp in activity unless they get substantially higher," said Malcolm Polley, president of Stewart Capital Advisors in Indiana, Pennsylvania. "But if gas prices remain at a sustained level, that will eat into people's discretionary dollars."
Just after the open, the Dow Jones industrial average was up 62.44 points, or 0.51%, at 12 192.89. The Standard & Poor's 500 Index was up 6.99 points, or 0.53%, at 1 326.87. The Nasdaq Composite Index was up 16.27 points, or 0.59%, at 2 797.32.
Brent crude oil prices inched lower. Worries over supply disruption from the Middle East and North Africa caused prices to spike last week. Brent crude was down 0.03% at $112.11.
Revolt in Libya has cut as much as three quarters of the country's oil output, prompting Saudi Arabia to step in and plug the supply gap to Libya's oil buyers.
Brent crude is up more than 10% this month, heading towards its sixth straight month of rises. It touched a 29-month high of near $120 a barrel last week.
The US dollar hit a 3-1/2-month low versus a currency basket as investors speculated the Fed will lag other central banks in raising interest rates to counter inflation risks.
The ICE futures exchange's dollar index, which tracks the greenback's performance against a basket of major currencies, skidded earlier to its lowest level since November 9.
US Treasury prices were little changed after data showed higher-than-forecast Chicago purchasing managers index.
The benchmark 10-year US Treasury note was unchanged with the yield at 3.4161%.
US Treasuries earlier were supported by New York Fed President William Dudley's assertion that the Fed was "very far" from achieving its dual mandate of maximum sustainable employment and price stability and should be wary of withdrawing monetary policy support.
In Europe, the pan-European FTSEurofirst 300 index of top shares was up 1.1% at 1 172, helped by agrochemical stocks after positive comments on the sector from Bayer .
According to fund tracker EPFR Global, a growing aversion to risky assets in the latest week fueled the biggest flows to global bond funds in more three months, and turned more investors away from emerging market stocks.
The rotation out of emerging markets into developed markets, partly driven by inflation concerns in emerging economies, have led to outperformance in developed markets. The MSCI emerging market index has lost 4.2% this year.
But Credit Suisse's private bank expected the fund rotation to ease in the second quarter.
