Stock markets around the world rallied on Thursday, while the US dollar fell, a day after the Federal Reserve signalled that interest rates would rise more slowly than many had expected.
While uncertainty over Greece continued to weigh on sentiment, hopes that a deal would be reached returned European equities to positive territory. US stocks hit session highs after a German newspaper reported Greece's aid will be extended until year-end, and the Nasdaq hit a closing record.
The Fed said on Wednesday that the economy was probably strong enough to support a rate increase this year. But it lowered its forecasts for 2015 growth and reduced its federal funds rate forecast.
Analysts are torn on whether the first rate hike in nearly a decade will come in September or December, but the comments indicated that no matter when the first one occurred, the move would not be aggressive.
"Gradualism for rate increases is a soothing message for the market," said Alan Gayle, senior investment strategist and director of asset allocation at RidgeWorth Investments in Atlanta. "September remains on the table, but the downward drift in the forecasts for next year means the increases will happen gradually, and that's a relief for investors."
The Dow Jones industrial average rose 180.1 points, or 1%, to 18,115.84 the S&P 500 gained 20.8 points, or 0.99%, to 2,121.24 and the Nasdaq Composite added 68.07 points, or 1.34%, to 5,132.95.
The benchmark 10-year US Treasury note fell 5/32 in price, pushing the yield up to 2.3237%. The US dollar index, which measures the greenback against a basket of currencies, fell 0.3%. The dollar fell 0.4% against the yen .
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The situation in Greece remains a concern. Euro zone leaders will hold an emergency summit on Monday to try to avert a default after bank withdrawals accelerated and government revenue slumped as Athens and its international creditors remain deadlocked over a debt deal.
Finance ministers of the 19-nation currency bloc failed to make any breakthrough on a cash-for-reforms agreement at talks in Luxembourg on Thursday, just 12 days before Greece must make a debt repayment to the International Monetary Fund.
"Greece is the best drama on TV right now, and we put the odds of a successful resolution at no better than a coin toss," Gayle said. "Clearly this has the potential to really increase near-term volatility."
The MSCI International ACWI Price Index rose 1% on the day while the pan-European FTSEurofirst 300 index ended 0.2% higher, erasing earlier losses. The euro rose 0.3%.
Overnight in Asia, MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.4%, while Japan's Nikkei skidded 1.1% to a one-week low as the yen gained against the dollar.
In commodities, oil rose on the back of the weaker dollar. Brent crude
Spot gold prices