GLOBAL MARKETS-U.S. firm in record bond sale, stocks rise
* Verizon sells $49 billion in bonds * Treasuries supported by Verizon deal as hedges lifted * U.S. dollar falls near two-week low on Fed By Ellen Freilich NEW YORK, Sept 11 (Reuters) - Fixed-income investors gobbled up $49 billion in notes sold by Verizon on Wednesday, the largest-ever corporate bond sale in history, while global stocks rose as Syria tensions eased and the dollar fell near a two-week low. Verizon Communications Inc's $49 billion bond deal drew a total of $101 billion in orders from pension funds, endowments, institutional buyers and wealth managers hungry for higher-yielding securities. Many corporations and countries are rushing to sell debt as they expect long-term interest rates to rise when the U.S. Federal Reserve reduces its stimulus in coming months. The Fed will hold a policy meeting next week. Verizon sold the bonds to partly finance its $130 billion buyout of its wireless operations, Verizon Wireless, from Vodafone. "Despite the specter of higher Treasury rates going forward, investor demand remains for attractively priced corporate credit deals," said Bonnie Baha, who heads Global Developed Credit at DoubleLine. As underwriters of the Verizon deal lifted hedges they had put on to offset exposure to the Verizon offering, that supported Treasuries prices. So did the Treasury's well-bid auction of re-opened 10-year notes. "Historically, reopenings have seen stronger demand than refundings, a trend that proved relevant today," said William O'Donnell, head Treasury strategist at RBS Securities in Stamford, Connecticut. "The auction was on the stronger side." Benchmark 10-year notes, up 3/32 in earlier trade, were up 14/32 after the auction. The yields eased to 2.92 percent from 2.97 percent on Tuesday and a two-year high of 3.01 percent on Friday. SYRIAN CONCERNS REMAIN Jitters over Syria have not been eliminated, but major U.S stock indexes still advanced. Obama voiced skepticism about Russia's plan to take control of Syria's chemical arsenal. "That is going to cause a little bit of angst, it won't cause the market to implode. The only reason that would happen is if these diplomatic efforts fail once again and the prospect of a real strike looms large again," said Ken Polcari, director of the NYSE floor division at O'Neil Securities in New York. On Wall Street, Apple Inc's shares were down about 5.1 percent a day after it unveiled a high-end iPhone with a fingerprint scanner as well as a cheaper model targeted at emerging markets. That hurt the Nasdaq Composite, which dropped 5.695 points or 0.15 percent, to 3,723.326. But the Dow Jones industrial average, aided in part by a rise in IBM shares, rose 104.79 points or 0.69 percent, to 15,295.85. The S&P 500 gained 3.1 points or 0.18 percent, to 1,687.09. Globally, MSCI's 45-country world index rose 0.38 percent. Oil recovered some ground with Brent crude at $111.51, above a 2 1/2-week trough of $110.59. The steadier performance came after a 4 percent drop in the past two sessions, its largest two-day fall since June. Gold edged up to $1,363.16 an ounce, above a three-week low of $1,356.85. In Europe, Britain's unemployment rate dipped to its lowest level since late 2012 in the latest sign its economy is picking up. Sterling rose to a seven-month high against both the dollar and the euro. The FTSEurofirst 300 pan-European share index rose 0.32 percent. Benchmark German government bonds tracked minor gains by U.S. Treasuries. Italy's benchmark yields rose above Spain's for the first time in 18 months amid concern about political instability and about Italy's banks before an examination of all euro zone banks by the European Central Bank in coming months. DOLLAR NEAR TWO-WEEK LOWS The Federal Reserve's policy meeting on Sept. 17-18 kept trading in check, with currency and the U.S. government debt markets keenly awaiting whether the Fed will begin to reduce its bond-buying program. The dollar fell near two-week lows against major currencies as some traders pared bets on a reduction in stimulus by the Fed next week. The yen rebounded against the dollar, though remained close to a seven-week low struck earlier. The euro rose 0.35 percent to $1.3313. The dollar fell 0.44 percent to 99.95 yen. The dollar index, a measure of the greenback versus six major currencies, slipped 0.4 percent to 81.501, the weakest since Aug. 29.
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