GLOBAL MARKETS-World stock index hits record, dollar softer after Fed

Thu Jun 19, 2014 3:30pm EDT

* MSCI's ACWI hits all-time high; Wall Street slips
    * Treasury yields fall to two-week low on dovish Fed tone
    * Oil hits nine-month high above $115 on Iraqi tensions
    * Dollar sags after Fed lowers long-term rate outlook

 (Adds oil settlement prices)
    By Herbert Lash
    NEW YORK, June 19 (Reuters) - A leading global stock index
hit an all-time high and the dollar eased on Thursday, a day
after the Federal Reserve lowered its forecast for target U.S.
interest rates in the long term, an outlook that lifted risk
appetite around the world.
    Stocks on Wall Street fell slightly, a day after the
benchmark S&P 500 hit a record on Wednesday when the Fed
expressed confidence the U.S. economic recovery was on track.
 
    Stocks in Europe rose to six-year highs and equities in Asia
posted strong gains, while U.S. Treasuries yields fell to
two-week lows on the Fed's more dovish tone at the close of its
two-day meeting on Wednesday. Yields later rebounded.
    The dollar sank to three-week lows as many traders had
expected the Fed to take a more hawkish stance because of recent
signs of a pick-up in price pressure.
    Steven Einhorn, vice chairman of hedge fund Omega Advisors
Inc, said the bull market in U.S. equities is not over and that
the S&P 500 will rise another 3 to 5 percent by year-end.
 
    "There is still a good deal of time and price left in it,
though I would say that given the advance we have made
year-to-date, that the upside between now and year-end is
respectable but not anything other than respectable," Einhorn
told Reuters. 
    MSCI's all-country world index, which
includes about 85 percent of global investable equities, rose
0.46 percent to pass an all-time high set in November 2007.
    In Europe, the FTSEurofirst 300 index of regional
shares rose 0.59 percent to close at 1,395.58 points after
earlier touching a six-year high.
    The Dow Jones industrial average fell 12.2 points, or
0.07 percent, to 16,894.42. The S&P 500 lost 0.44 points,
 or 0.02 percent, to 1,956.54 and the Nasdaq Composite 
dropped 9.48 points, or 0.22 percent, to 4,353.355. 
    Benchmark 10-year notes fell 2/32 in price to
yield 2.6224 percent. In Europe, peripheral euro zone bond
yields headed back toward historic lows. German bund futures
 ticked up 68 points to settle at 146.14.
    The greenback touched a three-week low against a basket of
currencies at 80.147. The euro strengthened to a 10-day
high against the dollar, while sterling advanced to its
highest level versus the greenback since October 2008.
    The euro gained 0.07 percent to $1.3605, while the dollar
rebounded against the yen, rising 0.05 percent to 101.96.
    Brent crude hit a nine-month high above $115 a barrel on
concerns heavy fighting in Iraq could limit oil supply from
OPEC's second-biggest producer.
    Brent rose 80 cents to settle at $115.06 a barrel.
The U.S. crude oil futures contract for July, which
expires on Friday, rose 46 cents to settle at $106.43 a barrel.

 (Reporting by Herbert Lash; Additional reporting by Jamie
McGeever in London; Editing by Meredith Mazzilli, Chizu Nomiyama
and Leslie Adler)
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