Dollar blows away 100 mark

The dollar powered higher yet on Friday, pressuring stocks and commodities, on expectations of a Federal Reserve interest rate hike that could slow U.S. corporate profits.

The dollar index was on track for a back-to-back weekly gain of more than 2%, setting up its strongest two-week performance in more than six years.

Stocks fell on Wall Street, with the S&P 500 set to post its third straight negative week. The index is about 3% below its record high set this month. Energy stocks were among the biggest losers, falling along with a steep decline in crude oil.

"The stronger dollar, the continued hammering of the euro equals continued lower equity prices ahead of the Fed comments next week," said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles. "We'll know more of the Fed's thinking on Wednesday but right now most people are expecting a rate hike to come in June and the equity markets not to be very receptive of that."

The Dow Jones industrial average fell 220.21 points, or 1.23%, to 17,675.01, the S&P 500 lost 20.53 points, or 0.99%, to 2,045.42 and the Nasdaq Composite dropped 39.60 points, or 0.81%, to 4,853.69.

The MSCI All-Country World equity index was down 0.9%, and emerging-markets stocks  fell 1.2%.

The FTSEurofirst 300 pan-European index  closed up 0.3%. Stocks in Europe continued to be supported by the massive bond-buying program at theEuropean Central Bank.

Investors are now looking ahead to the Federal Reserve's policy meeting on Tuesday and Wednesday, hoping that it will yield clues about the timing of a rate increase.

The divergence in monetary policy continued to push the euro lower against the greenback, hitting a 12-year low of $1.0460. It was last down 1.5% at $1.0474.

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