* 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 (Updates to close)
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.
"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, which measures its value against major currencies, has lost 7.4 percent.
The S&P materials sector, 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 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 gained 31.49 points, or 0.28 percent, to 11,164.05. The Standard & Poor's 500 Index added 2.54 points, or 0.21 percent, to 1,185.62. The Nasdaq Composite Index 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, which climbed 5.1 percent to $82.59 after it agreed to sell three plants to Mexican conglomerate Alfa for $600 million.
Both Office Depot Inc and tobacco company Lorillard Inc 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.
D.R. Horton Inc edged up 0.7 percent to $10.68 after data showed existing-home sales rose more than expected in September.
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)