* Turkish lira strengthens, below $2.13 for 1st time this
* Spot gold prices hit seven-week low
* Yellen's remarks give equities support
(Updates prices, changes comment)
By Rodrigo Campos
NEW YORK, March 31 Stocks in major markets rose
for a fifth straight session on Monday while gold, the yen and
other safety assets fell after Federal Reserve Chair Janet
Yellen reinforced the need for "extraordinary" commitment to
support the U.S. economy.
The euro continued to bounce back against the U.S. dollar
even as softer-than-forecast inflation numbers added to the
discussion of whether the European Central Bank will cut
interest rates when it meets later this week.
The S&P 500 was setting up for a monthly gain, the 14th in
the past 17 months. A winning quarter for the index would be the
fifth straight, matching streaks seen in 2006-2007 and
Yellen on Monday gave a strong defense for the Fed's
easy-money policies in a speech to a community investment
conference in Chicago.
"I think this extraordinary commitment is still needed and
will be for some time, and I believe that view is widely shared
by my fellow policymakers at the Fed," Yellen said at a
community reinvestment conference in Chicago.
Last week, top Fed officials scrambled to clarify just when
the U.S. central bank would finally tighten monetary policy
after private comments by Yellen intensified a guessing game
"What Yellen did today was to ... provide more clarity. When
there aren't concerns about the Fed tightening, the market can
breathe easier," said Joseph Tanious, global market strategist
at J.P. Morgan Asset Management in New York.
In afternoon trading, the Dow Jones industrial average
was up 135.32 points, or 0.83 percent, at 16,458.38. The
S&P 500 gained 14.86 points, or 0.80 percent, at
1,872.48. The Nasdaq Composite added 46.00 points, or
1.11 percent, at 4,201.76.
An index of European blue-chips hit its highest
intraday level in more than five years, but the FTSEurofirst 300
index of leading shares closed less than 0.1 percent higher
Tokyo's Nikkei stock average gained 0.9 percent to
touch a three-week high, supported by comments from Chinese
Premier Li Keqiang on Friday that Beijing was ready to support
the cooling economy, saying the government had the necessary
policies in place and would push ahead with infrastructure
U.S.-dollar denominated Nikkei futures edged up 0.2
INFLATION DATA AND THE ECB
The euro rose to a three-week high against the yen and edged
up versus the dollar after hitting a one-month low against the
greenback on Friday, even as inflation across the euro zone fell
to the lowest level in over four years. The data initially
supported expectations the ECB could act to counter the
deflationary threat as early as this week.
Forex traders polled by Reuters, however, said the ECB will
keep monetary policy unchanged when it meets on Thursday.
"The euro got trashed around the inflation numbers but then
came roaring back," said Graham Davidson, a spot dealer at NAB
"I think the market has probably priced in the story on the
fall in inflation. The bottom line is that the economy is
recovering and my hunch would be that the (ECB) does nothing."
The euro traded as high as $1.3806 from 1.37.0 hit Friday.
It was recently up 0.15 percent at $1.3773.
The yield on 10-year U.S. Treasuries rose on Monday to as
high as 2.7680 percent, trading within the top half
of last week's range, while the yield on the 30-year bond
briefly topped 3.6 percent. The benchmark 10-year
note was down 3/32, the yield at 2.7226 percent.
Bond market participants also stuck to expectations that
Friday's employment report for March will be better than
expected, bolstering the hawkish tone that Yellen took earlier
this month at a press conference.
"We're in a relatively hawkish environment, and some
investors may feel bonds are at an attractive level to short,"
said Jeffrey Young, U.S. interest rate strategist at Nomura
Securities International in New York.
In emerging markets, the Turkish lira hit its highest level
against the U.S. dollar this year after Prime Minister Tayyip
Erdogan declared victory in local polls that had become a
referendum on his rule.
The results stirred hopes that months of political
turbulence would ease. The lira touched 2.1298, its
strongest level against the greenback since late December.
Spot gold prices fell 0.8 percent to hit their lowest
in nearly seven weeks.
Crude oil futures dipped in volatile end-of-quarter trading,
pressured by news Russia was withdrawing some troops on the
Ukrainian border and concerns about the struggling U.S. labor
market voiced by Fed chair Yellen.
U.S. crude oil futures dipped 0.2 percent after three
days of gains and Brent fell 0.3 percent after four
(Reporting by Rodrigo Campos; additional reporting by Sam
Forgione, Ryan Vlastelica, Michael Connor and Jonathan Spicer;
Editing by Leslie Adler and Dan Grebler)