NEW YORK: Global stocks rose and the dollar edged higher on Monday, Aug 9 on growing expectations the U.S.Federal Reserve will signal this week it is ready to renew its stimulus efforts to prop up a weakening U.S. economy.
Disappointing U.S. jobs data on Friday fanned speculation the Fed may soon buy U.S. debt to support an economy that is showing signs of slipping back into recession and to fight potential deflation.
The dollar rose against major currencies as investors squared up positions before the Fed's policy-setting committee meets on Tuesday.
Trading was limited as investors refrained from chasing prices aggressively, with many already pricing in some form of modest easing. Total U.S. stock volume was 5.76 billion shares, the quietest session so far this year.
"We're expecting the Fed to officially lay the groundwork for a policy change predicated on another month of economic data," said Quincy Krosby, market strategist at Prudential Financial in Newark, New Jersey.
"If they actually come out and say they're going to start a new plan tomorrow, it might actually spook the market into believing that things are much worse than we thought."
The U.S. central bank may resume the purchase of debt in a bid to lower rates and encourage borrowing. It could also halt interest payments on banks' excess reserves to spur lending.
MSCI's all-country world index and its emerging markets index both rose about 5 percent.
The Dow Jones industrial average gained 45.19 points, or 0.42%, to close at 10,698.75. The Standard & Poor's 500 Index advanced 6.15 points, or 0.55%, to finish at 1,127.79. The Nasdaq Composite Index rose 17.22 points, or 0.75%, to close at 2,305.69.
The Dow was weighed down by Hewlett-Packard Co, whose shares fell 8 percent to $42.60. The company said on Friday its chief executive quit after an investigation found he falsified expense reports to conceal a "close personal relationship" with a female contractor.
ALL EYES AND EARS ON THE FED
"Today's trade is all about anticipation of tomorrow. The main question is, 'Will the Fed throw another quantitative easing bombshell?' And according to that, people are either buying or waiting on the sidelines," said John Canally, an economist at LPL Financial in Boston.
Against a basket of major currencies as measured by the U.S. Dollar Index, the dollar rose 0.39 percent to 80.720.
The euro was down 0.36 percent at $1.3234, and against the Japanese yen, the dollar was up 0.42 percent at 85.85.
Stocks also rose in Europe and Asia as investors bought riskier assets on expectations the Fed may inject extra stimulus to maintain a recovery, helping lift sentiment.
BONDS AND GOLD DIP, OIL CLIMBS
U.S. government debt prices slipped as investors cleared space for this week's $74 billion longer-dated supply and booked profits on recent gains fueled by fears over a double-dip recession.
The benchmark 10-year U.S. Treasury note was down 2/32 in price to yield 2.83 percent.
Oil rose for the first time in four sessions, edging back above $81 a barrel on Fed expectations.
U.S. crude for September delivery rose 78 cents, or 0.97 percent, to settle at $81.48 a barrel. Front-month ICE Brent crude rose 83 cents to settle at $80.99 a barrel.
Gold futures ended lower, snapping an eight-session winning streak, as a stronger dollar prompted investors to lock in profits ahead of a closely watched policy statement by the U.S. Federal Reserve.
U.S. gold futures for December delivery dropped $2.70 to settle at $1,202.60, the contract's first decline since July 27.
The MSCI index of Asia Pacific ex-Japan equities rose 0.8 percent> to its highest since May 4. Japan's Nikkei share average fell 0.7 percent, however, due to the negative impact of a stronger yen on exporters.'' - Reuters
Disappointing U.S. jobs data on Friday fanned speculation the Fed may soon buy U.S. debt to support an economy that is showing signs of slipping back into recession and to fight potential deflation.
The dollar rose against major currencies as investors squared up positions before the Fed's policy-setting committee meets on Tuesday.
Trading was limited as investors refrained from chasing prices aggressively, with many already pricing in some form of modest easing. Total U.S. stock volume was 5.76 billion shares, the quietest session so far this year.
"We're expecting the Fed to officially lay the groundwork for a policy change predicated on another month of economic data," said Quincy Krosby, market strategist at Prudential Financial in Newark, New Jersey.
"If they actually come out and say they're going to start a new plan tomorrow, it might actually spook the market into believing that things are much worse than we thought."
The U.S. central bank may resume the purchase of debt in a bid to lower rates and encourage borrowing. It could also halt interest payments on banks' excess reserves to spur lending.
MSCI's all-country world index and its emerging markets index both rose about 5 percent.
The Dow Jones industrial average gained 45.19 points, or 0.42%, to close at 10,698.75. The Standard & Poor's 500 Index advanced 6.15 points, or 0.55%, to finish at 1,127.79. The Nasdaq Composite Index rose 17.22 points, or 0.75%, to close at 2,305.69.
The Dow was weighed down by Hewlett-Packard Co, whose shares fell 8 percent to $42.60. The company said on Friday its chief executive quit after an investigation found he falsified expense reports to conceal a "close personal relationship" with a female contractor.
ALL EYES AND EARS ON THE FED
"Today's trade is all about anticipation of tomorrow. The main question is, 'Will the Fed throw another quantitative easing bombshell?' And according to that, people are either buying or waiting on the sidelines," said John Canally, an economist at LPL Financial in Boston.
Against a basket of major currencies as measured by the U.S. Dollar Index, the dollar rose 0.39 percent to 80.720.
The euro was down 0.36 percent at $1.3234, and against the Japanese yen, the dollar was up 0.42 percent at 85.85.
Stocks also rose in Europe and Asia as investors bought riskier assets on expectations the Fed may inject extra stimulus to maintain a recovery, helping lift sentiment.
BONDS AND GOLD DIP, OIL CLIMBS
U.S. government debt prices slipped as investors cleared space for this week's $74 billion longer-dated supply and booked profits on recent gains fueled by fears over a double-dip recession.
The benchmark 10-year U.S. Treasury note was down 2/32 in price to yield 2.83 percent.
Oil rose for the first time in four sessions, edging back above $81 a barrel on Fed expectations.
U.S. crude for September delivery rose 78 cents, or 0.97 percent, to settle at $81.48 a barrel. Front-month ICE Brent crude rose 83 cents to settle at $80.99 a barrel.
Gold futures ended lower, snapping an eight-session winning streak, as a stronger dollar prompted investors to lock in profits ahead of a closely watched policy statement by the U.S. Federal Reserve.
U.S. gold futures for December delivery dropped $2.70 to settle at $1,202.60, the contract's first decline since July 27.
The MSCI index of Asia Pacific ex-Japan equities rose 0.8 percent> to its highest since May 4. Japan's Nikkei share average fell 0.7 percent, however, due to the negative impact of a stronger yen on exporters.'' - Reuters
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