By Herbert Lash
NEW YORK, June 17 (Reuters) - Global equity markets rose and
the dollar strengthened against the yen on Monday on
expectations the Federal Reserve will reinforce its commitment
this week to supporting the U.S. economic recovery.
U.S. stocks pared gains late in the session as confidence
eroded that Chairman Ben Bernanke will provide investors with a
better idea on the U.S. central bank's monetary policy at the
end of a two-day meeting on Wednesday.
Wall Street had rallied more than 1 percent earlier in the
session, recovering much of last week's losses.
'We're held hostage in front of comments about what the
direction for stimulus is, and the market is always more
volatile when it is in front of the information flow,' said Dan
Veru, chief investment officer at Palisade Capital Management
LLC in Fort Lee, New Jersey, which oversees $3.8 billion.
The Fed meeting has taken on greater significance since
Bernanke said in May that the U.S. central bank may decide to
pare back its bond buying in its next few meetings if the
economy gains momentum.
Those comments halted a stock market rally and sparked a
surge in Treasuries yields while igniting a dramatic uptick in
volatility as investors tried to gauge the effects of a Fed
reduction in its asset purchase program.
'The chairman will probably say something to the effect of,
the Fed will use every means at its disposal to make sure the
economic growth we've seen continues,' said Angel Mata, managing
director of listed equity trading at Stifel Nicolaus Capital
Markets in Baltimore.
The Dow Jones industrial average was up 103.27
points, or 0.69 percent, at 15,173.45. The Standard & Poor's 500
Index was up 11.14 points, or 0.68 percent, at 1,637.87.
The Nasdaq Composite Index was up 27.44 points, or 0.80
percent, at 3,451.00.
The market built on its sharp gains after data showed U.S.
homebuilder sentiment jumped in June, rising above 50 for the
first time since the start of the housing crisis in a vote of
confidence for the sector's recovery.
'The market is beginning to adjust itself to an eventual
trimming from the Fed toward the beginning of next year,'
said Peter Cardillo, chief market economist at Rockwell Global
Capital in New York.
The FTSEurofirst 300 index of top European shares
rose 0.72 percent to close at 1,184.36, while MSCI's all-country
world equity index rose 0.85 percent.
Despite the recovery, the rally for some did not look wholly
convincing. The FTSEurofirst 300 is still down about 6 percent
from its 2013 peak of 1,258.09 struck in late May.
'The rallies look corrective in nature. We don't see any new
money participating in it,' said Logic Investments' strategy
head Peter Rice. 'If anything, the risk still remains to the
A report from the New York Fed that showed growth in New
York state manufacturing picked up in June also supported U.S.
stocks, but the details were less encouraging as new orders and
employment fell to their lowest levels in five months.
The dollar rose against the yen for the first time in five
trading sessions as stock markets gained worldwide. Japan's
Nikkei index jumped 2.7 percent.
But traders said range-trading is likely to dominate until
the Fed's policy announcement on Wednesday.
The dollar briefly extended its gains after the New York
state manufacturing report topped economists' expectations.
'The dollar has been selling off over the last week or so,
so I think it probably has more room to gain than to lose,' said
John Doyle, currency strategist at Tempus Inc in Washington.
The dollar rose 0.51 percent to 94.55 yen. The euro
rose 0.16 percent to $1.3368.
Treasury prices pared early gains. The benchmark 10-year
U.S. Treasury note fell 14/32 in price to yield
Brent crude oil futures hit a 10-week high close to $107 a
barrel on Monday as tensions rose in the Middle East, but prices
finished slightly lower after a late selloff in U.S. gasoline
Brent crude oil futures for August fell 46 cents to
settle at $105.47 a barrel.
U.S. light crude oil futures settled down 8 cents at
(Reporting by Herbert Lash; Editing by Dan Grebler and Nick
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