GLOBAL MARKETS-Shares near all-time highs, dollar moves higher

Tue Jul 29, 2014 12:04pm EDT

(Updates with U.S. market open)
    * Wall St little changed as industrials, techs weigh;
telecoms gain
    * Fed policy meeting, U.S. GDP in focus
    * U.S. Treasuries rally; euro zone bond yields at record
lows
    * Emerging market shares hit three-year high

    By Angela Moon
    NEW YORK, July 29 (Reuters) - World share markets hovered
just below all-time highs on Tuesday as investors drew
encouragement from a rally in China, while Russian stocks
enjoyed some respite after three days of heavy selling.
    Investors remained cautious, however, reflecting
geopolitical jitters and the torrent of U.S. economic news due
this week, including a Federal Reserve meeting, GDP data on
Wednesday and non-farm payrolls on Friday.
    Wall Street was little changed, erasing earlier gains built
on news about a spinoff in the telecommunications sphere that
sent most stocks in the sector soaring and on
better-than-expected results from Dow components Pfizer and
Merck.
    The Dow Jones industrial average rose 4.28 points or
0.03 percent, to 16,986.87. The S&P 500 lost 1.25 points
or 0.06 percent, to 1,977.66 and the Nasdaq Composite 
added 8.58 points or 0.19 percent, to 4,453.49.
    The U.S. dollar hit fresh eight-month highs against the euro
and rose slightly against the yen and Swiss franc as traders
awaited U.S. economic data and a potentially more hawkish tone
from the Fed.
    Analysts said the Fed, which is expected to cut its monthly
bond-buying program by another $10 billion after its two-day
meeting ends Wednesday, may hint at an approaching interest rate
hike in light of U.S. labor market growth.
    "People are starting to believe there is going to be
concrete action from the Fed in terms of raising rates," said
Joseph Trevisani, chief market strategist at WorldWideMarkets in
Woodcliff Lake, New Jersey.
    U.S. Treasuries prices increased, helped by record low
yields on German government bonds, and the U.S. yield curve
flattened to five-year lows before a sale of new five-year
notes. 
    The debt pared gains, however, after U.S. consumer
confidence jumped in July to its highest since October 2007.
 
    Ten-year German government bond yields, the benchmark for
euro zone borrowing costs, hit record lows of 1.12 percent
 amid the prospect of a fresh round of long-term
loans to banks from the European Central Bank. 
    Rouble-traded Russian stocks gained despite fresh
fighting in Ukraine and expectations of more EU sanctions. The
dollar-denominated RTS index, however, was down slightly
to its lowest in nearly three months. 
    An index of European shares rose 0.3 percent.
    "The initial fear (of Russia/West tensions) is not really
there any more," said Rabobank economist Philip Marey. 
    "So now we are looking at the usual suspects: how strong is
the euro zone recovery? How strong is the U.S. recovery? And
what does it mean for the central banks?"
    EU diplomats will try to forge an agreement on the final
shape of measures to target capital markets, defence, and
sensitive technologies key to some of Russia's major industries.
    China shares continued their charge overnight, led by banks
after the country's fifth-biggest bank by assets said it was
studying a plan to sell stakes to private investors. The CSI300
 index of leading Shanghai and Shenzhen A-shares added
0.3 percent, its eighth gain in a row, lifting it to a 2014
high. 
    That, in turn, pushed MSCI's emerging market index 
to a three-year high and kept the All World benchmark
 within reach of this month's all-time peak. 

 (Reporting by Angela Moon)