* Markets await Fed meeting announcement, data on U.S. and
* Brent oil holds above $113 a barrel
* US consumer confidence data dents enthusiasm a little
* Euro climbs to 14-month high vs dollar
NEW YORK, Jan 29 Stock markets around the world
rose and the dollar fell to a 14-month low against the euro on
Tuesday amid rising risk appetite as the Federal Reserve began a
two-day policy meeting in which it is expected to maintain its
easy monetary policy.
A report that showed U.S. single-family home prices rose in
November, building on a string of gains that point to a housing
market that is on the mend, added to investor optimism on
Still, investors were cautious about making big bets, given
mixed U.S. economic data, the run-up in stocks in recent weeks
and risk in the form of a slew of economic reports for the rest
of the week, as well as the Fed meeting.
Markets were initially weaker on a report showing U.S.
consumer confidence dropped in January to its lowest in more
than a year. But that same data kept alive
expectations the Fed will maintain its ultra-easy monetary
policy for the foreseeable future.
"There is a serious split between the attitudes of consumers
and the attitudes of the markets," said Joseph Trevisani, chief
market strategist at WorldWideMarkets, in Woodcliff Lake, New
Jersey, after the consumer confidence data. "This may make for a
weaker dollar as it makes it less likely the Fed will
contemplate an early removal of QE," referring to the central
bank's debt-buying program called quantitative easing.
The euro extended gains versus the dollar, breaking above
key resistance to hit a 14-month high. It last traded at
The Dow Jones industrial average gained 72.49 points,
or 0.52 percent, at 13,954.42. The Standard & Poor's 500 Index
was up 7.66 points, or 0.51 percent, at 1,507.84. The
Nasdaq Composite Index was down 0.64 points, or 0.02
percent, at 3,153.66.
"A move like this in one month is extraordinary, and keeping
the gains going will depend on concrete news like earnings and
data that show the economy is getting better," said Peter Tuz,
president of Chase Investment Counsel in Charlottesville,
Virginia. "We haven't seen enough of that to make people jump in
after the rally we've had."
Recent gains in stocks have largely come on a strong start
to the corporate earnings season, and that trend continued on
Tuesday with positive results from both Valero and
European stocks scaled two-year highs, boosted by miners, as
optimism about economic recovery gained momentum following the
encouraging U.S. home price data and comments on growth in top
metals consumer China.
The benchmark FTSEurofirst 300 index was up 0.4
percent. The index is up 24 percent from its June lows.
Gains across Asian markets, led by a big rally in Australian
shares, helped to lift MSCI's world equity index
0.6 percent to a 20-month high.
In the U.S. Treasury debt market, benchmark 10-year yields
proved unable to hold above the key 2 percent level touched on
Monday, with investors looking ahead to a debt auction later in
the day, as well as the Fed meeting.
The benchmark 10-year U.S. Treasury note was
down 9/32, the yield at 1.9955 percent.
Debt prices had earlier reversed losses to advance after the
U.S. consumer confidence data.
Investors now await the outcome of the Fed meeting on
Wednesday. The Fed is not expected to change its stance after
deciding only in December to loosen conditions further. However,
investors are watching to see if changes in the membership of
the policy-setting committee for 2013 could signal a shift in
Gold snapped a four-day losing streak to rise 0.5 percent to
around $1,662.60 an ounce, but any hint that the Fed is
considering an end to its loose monetary policy would probably
send the precious metal down.
Brent crude and U.S. oil prices rose on the U.S. housing
data. Brent crude climbed 72 cents to $114.20 a barrel
and U.S. crude rose $1.01 to $97.45 per barrel.