4 Min Read
* UniCredit unveils plans to raise 13 billion euros
* Dow nears 20,000 just weeks after breaching 19,000
* Fed expected to raise rates but markets focus on forecasts (Adds quote, European stocks' close, updates prices)
By Caroline Valetkevitch
NEW YORK, Dec 13 (Reuters) - World stock indexes rose while the dollar held steady on Tuesday as investors turned their focus to the U.S. Federal Reserve's expected interest rate hike this week and potential changes in its inflation and growth outlook.
Gains in technology and energy companies helped lift the S&P 500 and Dow Jones industrial average to fresh record highs, with the Dow less than 1 percent away from hitting the 20,000 mark for the first time. It breached 19,000 only last month.
The move extended the U.S. stock market's post U.S.-election rally, driven largely by hopes of better U.S. economic growth under President-elect Donald Trump.
Yet uncertainty over whether the Fed would signal a slow or fast pace of rate increases following its meeting kept the dollar steady against a basket of currencies.
The Fed on Wednesday is widely expected to hike interest rates for the first time since last December and only the second since the 2007-2009 financial crisis, but investors will be examining the central bank's statement and economic forecasts for any signs of how policymakers think Trump's election affects the outlook for growth and inflation.
The question is, "how much can their forecast change. In reality, the forecast can't change that much because the data hasn't changed that much," said Michael O'Rourke, chief market strategist at JonesTrading in Greenwich, Connecticut. "The stock market is pricing in a big uptick in growth next year.
"Tomorrow what will be key is how the market digests that forecast."
The Dow Jones industrial average rose 116.16 points, or 0.59 percent, to 19,912.59, the S&P 500 gained 15.31 points, or 0.678346 percent, to 2,272.27 and the Nasdaq Composite added 61.01 points, or 1.13 percent, to 5,473.55.
"I think what we're seeing is the rally broaden out a little bit beyond the Russell 2000 and the financial sector," O'Rourke said, adding that technology has not gained as much as other sectors since the Nov. 8 election.
In Europe, stocks were helped by gains in banks after Italy's largest lender unveiled a 13 billion-euro share issue.
UniCredit launched Italy's biggest share issue to clean up its balance sheet and boost profitability, the latest move to strengthen the Italian banking sector, which has been clouding the outlook for European stocks.
MSCI's all-country world stock index was up 0.8 percent, the pan-European STOXX 600 share index ended up 1.1 percent.
The U.S. dollar index was last up 0.04 percent at 101.07.
In the U.S. bond market, the U.S. 10-year note prices were down 1/32, while the yield rose to 2.481 percent from 2.479 percent late on Monday.
Earlier on Monday, the yield hit 2.528 percent, its highest level since Sept. 29, 2014, according to Reuters data.
Oil prices edged higher in choppy trading, a day after surging to an 18-month high on Monday after the world's top crude producers agreed to the first joint output cut since 2001.
U.S. West Texas Intermediate (WTI) gained 20 cents to $55.03 a barrel, while Brent crude was up 14 cents at $55.82.
For Reuters' new Live Markets blog on European and UK stock markets, see reuters://realtime/verb=Open/url=http://emea1.apps.cp.extranet.thomsonreuters.biz/cms/?pageId=livemarkets
Additional reporting by Sam Forgione in New York; Nigel Stephenson, John Geddie, Patrick Graham and Atul Prakash in London; Editing by Andrew Roche and Nick Zieminski