January 25, 2018 / 5:55 PM / in 25 days

US STOCKS-Robust earnings, weak dollar lift Wall Street

* Biogen climbs after earnings

* Dollar slumps after Draghi comments

* Dow up 0.62 pct, S&P 500 up 0.23 pct, Nasdaq up 0.25 pct (Updates with downturn in Caterpillar shares)

By Chuck Mikolajczak

NEW YORK, Jan 25 (Reuters) - Stocks on Wall Street advanced on Thursday, buoyed by solid corporate earnings and continued weakness in the dollar after comments by European Central Bank President Mario Draghi and U.S. Treasury Secretary Steven Mnuchin.

Biogen Inc surged 2.11 percent after the drugmaker reported fourth-quarter revenue that beat Wall Street estimates on higher sales of recently launched drug Spinraza. The gains lifted the S&P healthcare sector 0.78 percent as one of the best-performing S&P groups.

Shares of Caterpillar Inc were volatile in the wake of its quarterly earnings, falling as much as 3.5 percent and rising as much as 2.8 percent. Shares were last up 0.59 percent.

“If growth continues the way we expect, we should see a rotation out of these mega cap tech companies and into more of the higher-leveraged value companies,” said Jack Ablin, chief investment officer at BMO Private Bank in Chicago.

“And Caterpillar is it.”

Robust quarterly earnings reports and economic data have helped propel major Wall Street indexes to a strong start this year, with each on track for a fourth week of gains.

According to Thomson Reuters data through Thursday morning, earnings growth for the benchmark S&P 500 is expected at 12.7 percent. Of the 118 companies in the index that have posted results, 78.8 percent have topped expectations, versus the 72 percent average over the previous four quarters.

The Dow Jones Industrial Average rose 162.23 points, or 0.62 percent, to 26,414.35, the S&P 500 gained 6.46 points, or 0.23 percent, to 2,844 and the Nasdaq Composite added 18.38 points, or 0.25 percent, to 7,433.44.

The European Central Bank kept its ultra-easy monetary policy unchanged, but weakness in the U.S. dollar accelerated as Draghi warned the surge in the euro was a source of uncertainty and said the bank might have to review strategy if U.S. comments on a weak dollar lead to a change in monetary conditions.

The dollar fell 0.49 percent against a basket of major currencies and held near three-year lows. A weaker dollar tends to benefit large U.S. multinational companies.

The greenback had suffered its biggest daily percentage drop in seven months on Wednesday after Mnuchin said he welcomed a weaker currency.

On Thursday, Mnuchin said a weaker dollar benefited U.S. trade balances in the short term but that he believed in the long-term strength of the currency.

“Essentially, he said what every previous Treasury secretary had thought, just never uttered,” said Ablin.

Weekly initial jobless claims indicated the labor market continues to tighten. However, sales of new U.S. single-family homes fell more than expected in December, recording their biggest drop in nearly 1-1/2 years.

Ford Motor Co shares slumped 3.28 percent after the automaker posted a lower-than-expected quarterly net profit. The company’s bottom line was hurt by rising commodity costs and unfavorable currency exchange rates, and it expected more pain to come from higher raw material prices in 2018.

After the close of trading on Thursday, results are expected from Intel Corp and Starbucks Corp. (Editing by Bernadette Baum and Nick Zieminski)

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