GLOBAL MARKETS-Stocks, oil, euro higher ahead of Bernanke
(Updates to U.S. market open, changes dateline, previous LONDON)
* Investors hope for more Fed stimulus to support growth
* Euro climbs to one-week high after German data
* Analysts caution Bernanke could disappoint easing hopes
By Wanfeng Zhou
NEW YORK, July 17 (Reuters) - Global shares, oil prices and the euro rose on Tuesday as investors awaited testimony from U.S. Federal Reserve Chairman Ben Bernanke, who could hint at more steps to stimulate a flagging economic recovery.
Weak U.S. retail sales data and a cut in the International Monetary Fund's global growth forecast on Monday have bolstered the view that the world economy is slowing, encouraging markets to position for further action by central banks.
U.S. stocks opened higher, reversing some of the previous day's losses, as traders awaited testimony from Bernanke and also boosted by strong earnings from Goldman Sachs.
Bernanke is testifying before the U.S. Senate Banking Committee at 10 a.m. (1400 GMT).
However, many analysts said recent indications have suggested the Fed won't announce another round of quantitative easing unless economic conditions deteriorate further.
"Bernanke will say that the Fed remains vigilant but I don't think we'll rally unless he gives any signal that quantitative easing is imminent, which I think is unlikely," said Wayne Kaufman, chief market analyst at John Thomas Financial in New York. "Investors hoping for QE, or a time frame for QE, will be disappointed."
World share markets were up 0.5 percent at 311.03 points.
On Wall Street, the Dow Jones industrial average was up 65.85 points, or 0.52 percent, at 12,793.06. The Standard & Poor's 500 Index was up 6.89 points, or 0.51 percent, at 1,360.53. The Nasdaq Composite Index was up 15.84 points, or 0.55 percent, at 2,912.78.
European shares edged up 0.2 percent.
The prospect of more stimulus for the U.S. economy weighed on the U.S. dollar as more quantitative easing by the Fed would flood the financial system with dollars and diminishing the currency's value.
But analysts say there is a chance that the dollar may bounce or assets such as stocks and growth-linked currencies could drop if the Fed chief stops short of signalling more stimulus.
The euro rose 0.1 percent to $1.2278. It hit a one-week high of $1.2315 shortly after the release of the German ZEW survey, which was not as bad as some had feared.
The dollar gained 0.3 percent to 79.12 yen, a day after dropping to a one-month low. Expectations that the Bank of Japan could intervene and check gains by the yen was keeping investors wary, traders said.
Brent futures rose $1.11 per barrel to $104.48 a barrel in the fourth straight day of gains. U.S. crude rose 70 cents to $89.13.
Benchmark 10-year Treasury notes were down 7/32 in price, yielding 1.4943 percent. (Additional reporting by Ryan Vlastelica and Gertrude Chavez-Dreyfuss in New York and Richard Hubbard in London; Editing by Theodore d'Afflisio)
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