* Empire State manufacturing data miss estimates
* Homebuilder sentiment falls but builders optimistic
* Indexes up: Dow 0.92 pct, S&P 0.88 pct, Nasdaq 0.76 pct (Updates to mid-morning, adds comments)
By Sinead Carew
March 16 (Reuters) - U.S. stocks rose on Monday, with the benchmark S&P 500 rebounding after three weeks of losses, as a stronger euro against the U.S. dollar reassured investors who had worried over the impact of a robust dollar on mutinationals' earnings.
Investors were cautious ahead of a U.S. Federal Reserve statement due on Wednesday, when they expect the central bank to give a clearer signal on the timing of its first interest rate hike in almost a decade.
The S&P 500 has fallen 2.7 percent in the last three weeks, including a 0.9 percent drop last week. The Dow lost 0.6 percent last week while the Nasdaq declined 1.1 percent.
"It's just a little bit of relief from last week's selloff," said Joseph Benanti, managing director, sales and trading of Rosenblatt Securities in New York.
Until Fed Chair Janet Yellen's statement on Wednesday afternoon, Benanti is expecting light volume.
"You're going to have a thin market that's pushed around pretty easily," he said.
A recovery in the euro reassured some investors as a rapidly rising U.S. dollar would put even more pressure on U.S. corporate earnings, said Nick Colas, chief market strategist at brokerage Convergex in New York.
The dollar fell across the board on Monday, as investors fretted that the greenback's rapid rise could prompt the Federal Reserve to be a little more cautious about raising interest rates this year.
At 10:49 a.m., the Dow Jones industrial average rose 163.63 points, or 0.92 percent, to 17,912.94, the S&P 500 gained 17.97 points, or 0.88 percent, to 2,071.37 and the Nasdaq Composite added 37.20 points, or 0.76 percent, to 4,908.96.
Manufacturing activity growth in New York State slowed in March for a second month as the pace of new orders contracted to its weakest since November 2013, a New York Federal Reserve survey showed on Monday.
U.S. manufacturing output fell in February for a third month as automobile production tumbled, pointing to slower economic growth in the first quarter.
U.S. homebuilder sentiment declined for a third straight month in March but still showed more builders view market conditions as favorable, the National Association of Home Builders said on Monday.
The S&P healthcare sector was up 1.8 percent, helped by a 3.6 percent price increase in shares of Amgen to $159.73, following promising data in studies of a new class of cholesterol-reducing drugs.
Salix Pharmaceuticals shares rose 1.98 percent to $172.76 after it agreed to an increased $173 per share offer from Valeant Pharmaceuticals .
Advancing issues outnumbered declining ones on the NYSE by 1,856 to 1,029, for a 1.80-to-1 ratio on the upside; on the Nasdaq, 1,442 issues rose and 1,085 fell for a 1.33-to-1 ratio.
The benchmark S&P 500 index was posting 43 new 52-week highs and 9 new lows; the Nasdaq Composite was recording 114 new highs and 34 new lows. (Editing by Bernadette Baum)