US STOCKS-Wall St advances on dollar weakness, Fed bets

                                
  
                                
 * Dollar pressure boosts equities after G20 meeting
                                
 * Commodities also benefit from greenback weakness
                                
 * September existing-home sales rise more than expected
                                
 * Dow up 0.3 pct, S&P up 0.2 pct, Nasdaq up 0.5 pct
                                
 * For up-to-the-minute market news see [STXNEWS/US]
  (Adds Amgen, Texas Instruments earnings in paragraph 14)
                                
 By Chuck Mikolajczak
                                
 NEW YORK, Oct 25 (Reuters) - U.S. stocks rose to a
five-and-a-half month high on Monday as a falling dollar,
partly driven by expectations of further stimulus by the
Federal Reserve, prompted investors to buy riskier assets.
                                
 The slide in the greenback continued after a weekend
meeting of the Group of 20 stopped short of setting targets to
reduce trade imbalances. Bets the Fed will stimulate growth by
effectively printing money to buy assets has weakened the
dollar, which in turn has lifted commodity prices. For details,
see [ID:nTOE69M004] [ID:nTOE69K01G]
                                
 "We have a lower dollar, we have low and benign interest
rates, and you can't beat that combination for reflating the
economy or stock prices," said Hugh Johnson, chief investment
officer of Hugh Johnson Advisors LLC in Albany, New York.
                                
 Equities and the dollar have formed an inverse
relationship, so as the dollar drops, equities often advance.
Since Sept. 1, the S&P has risen 13 percent while the dollar
index <.DXY>, which measures its value against major
currencies, has lost 7.4 percent. For a Q+A, see
[ID:nN2199257]
                                
 The S&P materials sector <.GSPM>, which is particularly
sensitive to the weak dollar, gained 1.7 percent and was the
index's best performing group. Freeport-McMoRan Copper and Gold
Inc <FCX.N> advanced 2.2 percent to $96.07.
                                
 But stocks finished the session well off their highs as the
dollar came off its lows late and the euro pared gains.
                                
 "It's all about the currency -- the dollar strengthened and
euro faded," said Stephen Massocca, managing director at
Wedbush Morgan in San Francisco.
                                
 "Commodities, including copper, also did the same thing,
their gains were lost toward the market close."
                                
 The Dow Jones industrial average <.DJI> gained 31.49
points, or 0.28 percent, to 11,164.05. The Standard & Poor's
500 Index <.SPX> added 2.54 points, or 0.21 percent, to
1,185.62. The Nasdaq Composite Index <.IXIC> advanced 11.46
points, or 0.46 percent, to 2,490.85.
                                
 The benchmark S&P 500 index ended at its highest since May
3.
                                
 In a research report, Goldman Sachs said the Federal Open
Market Committee is almost certain to announce renewed monetary
easing at its Nov. 2-3 meeting.
                                
 Goldman analysts calculated the Fed may have to buy up to
$4 trillion in assets to achieve desired growth and inflation
targets.
                                
 Further boosting materials stocks was Eastman Chemical Co
<EMN.N>, which climbed 5.1 percent to $82.59 after it agreed to
sell three plants to Mexican conglomerate Alfa <ALFAA.MX> for
$600 million. [ID:nN25265406]
                                
 After the closing bell, chipmaker Texas Instruments Inc
<TXN.N> shed 0.4 percent to $28.86 while biotech company Amgen
Inc <AMGN.O> lost 0.6 percent to $57.60 after posting quarterly
results. [ID:nN25274454] [ID:nN25286796]  
                                
 During the session, Office Depot Inc <ODP.N> and tobacco
company Lorillard Inc <LO.N> rallied after posting
stronger-than-expected profits. Office Depot also said that its
embattled chief executive would be stepping down, sending the
stock up 3.5 percent to $4.79. Lorillard advanced 1.3 percent
to $85.14. [ID:nN25221945] [ID:nN25191964]
                                
 D.R. Horton Inc <DHI.N> edged up 0.7 percent to $10.68
after data showed existing-home sales rose more than expected
in September. [ID:nN25265199]
                                
 Volume was light with about 7.2 billion shares traded on
the New York Stock Exchange, the American Stock Exchange and
Nasdaq, below the year-to-date moving average of 8.76 billion.
                                
 Advancing stocks outnumbered declining ones on both the
NYSE and the Nasdaq, by about 3 to 2.
 (Reporting by Chuck Mikolajczak; Additional reporting by
Angela Moon; Editing by Kenneth Barry)