GLOBAL MARKETS-Stocks rebound as Fed indicates no rate hike soon

Wed Aug 20, 2014 4:57pm EDT

* Wall Street rebounds on Fed minutes, dollar rallies
    * BoE minutes raise specter of rate hike in Britain
    * Euro below $1.33 for first time in nearly a year

 (Adds close of U.S. markets)
    By Herbert Lash
    NEW YORK, Aug 20 (Reuters) - Global equity markets rose on
Wednesday after minutes from the Federal Reserve indicated there
is no rush to bring forward plans to raise interest rates in the
future, reversing earlier declines that were driven by hints
from the Bank of England of an early rate hike.
    The Fed said it has been surprised by how quickly the U.S.
labor market is healing, yet the recovery needs to be more
convincing to change its view on when to increase rates.
 
    Stocks on Wall Street rallied after the release of the Fed
minutes, suggesting investors believe there will be no change in
monetary policy, while U.S. Treasuries prices fell.
    "The Fed remains dovish. However, one eye is looking towards
improvements in labor markets. Potentially a rate increase might
come slightly sooner or the increases might come faster than
expected," said Putri Pascualy, credit strategist For Pacific
Alternative Asset Management Company, in Irving, California.
    MSCI's all-country world equity index rose
0.05 percent.
    The Dow Jones industrial average closed up 59.54
points, or 0.35 percent, to 16,979.13. The S&P 500 gained
4.91 points, or 0.25 percent, to 1,986.51, and the Nasdaq
Composite dropped 1.032 points, or 0.02 percent, to
4,526.482.
    Earlier in Europe, the FTSEurofirst 300 index of
leading European shares closed down 0.07 percent at 1,346.02
points, pushed lower in part from minutes of a Bank of England
meeting where two policymakers took a hawkish stance on interest
rates. 
    A warning from brewer Carlsberg that profits
would fall this year due to deteriorating conditions in Russia 
also rattled European investors. 
    Sterling and UK bond yields rose after the surprise tilt
toward higher British rates, while the U.S. dollar advanced to
its highest level against the euro since last September.
    The Fed minutes come ahead of Fed Chair Janet Yellen's
widely anticipated address to the annual gathering of central
bankers in Jackson Hole, Wyoming, on Friday.
    With U.S. and global stock indexes trading close to all-time
highs, investors await a reaffirmation of the accommodative
monetary policies that have helped spur a global rally.
    "The next leg up is going to come from what we hear on
Friday from Yellen," said Phil Orlando, chief equity market
strategist at Federated Investors in New York. "The market has
been a little bit on tenterhooks."
    The dollar broke through resistance at $1.3300 and last
November's high of $1.3295 per euro to trade as high as
$1.3275. It was last up 0.41 percent versus the euro at $1.3265.
    It climbed to a 4-1/2-month high against the yen.
    U.S. crude oil rose more than $1 a barrel ahead of the
September contract's expiry on Wednesday and as crude stocks in
the United States posted a sharp fall, while Brent bounced off a
14-month low to reach $102.
    Brent crude for delivery in October settled 72 cents
higher at $102.28 a barrel. The U.S. crude contract for
September delivery rose $1.59 to settle at $96.07.
    U.S. Treasuries fell, with the benchmark 10-year note
 down 6/32 in price to yield 2.4281 percent.

 (Reporting by Herbert Lash; Additional reporting by Jamie
McGeever in London; Editing by Dan Grebler, James Dalgleish and
Leslie Adler)