The dollar added to recent gains, on a continued reaction to more hawkish comments from Federal Reserve officials suggesting that a June interest-rate increase could still be a possibility. U.S. bond yields were also higher, after a weak sale of 30-year Treasury bonds.
The dollar rose to a three-week high against the euro. Oil prices rebounded from sharp declines on Wednesday.
The Dow Jones industrial average rose 56.22 points, or 0.31 percent, to 17,958.73, the S&P 500 gained 9.28 points, or 0.45 percent, to 2,091.18, and the Nasdaq Composite added 23.74 points, or 0.48 percent, to 4,974.57.
The U.S. Treasury market weakened after a weak auction of $13 billion in 30-year bonds. The bonds were sold at a high yield of 2.597 percent, about two basis points higher than where the issue was trading prior to the auction.
Bond yields rose after the auction, with the 10-year note's yield spiking to 1.96 percent, the highest in more than a week.
Recent comments from Federal Reserve officials, including Wednesday's release of minutes from the Fed's March policy meeting, have suggested the U.S. central bank will move in a measured fashion. The expectation that a rate increase will not come until later in the year helped boost stocks, as it has since late March.
However, on Wednesday, New York Fed President William Dudley said at a Reuters event that a June interest-rate increase was still possible if the labour market showed sufficient strength. That put a spring into the dollar, which of late has weakened after a number of lacklustre U.S. economic reports.
"It'll put the focus on U.S. data next week, in particular, the U.S. retail sales number, to see if weakness seen in the Q1 data reports were largely transitory. We're looking for a turnaround in the dollar to move higher next week," said Mark McCormick, a foreign exchange strategist at Credit Agricole in New York.
European markets ended higher after German industrial output and trade data showed the continent's largest economy improving in February. Europe's EuroFirst 300 index ended up 1.1 percent at 1,630.08 points, the highest level since July 2007.
The dollar index was up 1.1 percent, its fourth consecutive daily rise. The euro was down 1.1 percent at $1.0656, marking its lowest close since March 17.
Crude oil edged higher, following a plunge overnight triggered by a rise in U.S. crude stocks and news of record Saudi oil production. [O/R]
U.S. crude was up 37 cents to settle at to $50.79 a barrel. Brent rose $1.02 to settle at $56.57.
MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.7 percent. Japanese stocks rose 0.75 percent to a 15-year high, while Hong Kong rose 2.7 percent to a seven-year peak.
(Reporting by David Gaffen; Additional reporting by Dan Bases in New York; Editing by Ted Botha, Christian Plumb and Leslie Adler)
By David Gaffen
