* Emerging market shares stabilize, Wall Street up
* Investors look to Turkey central bank policy meeting
* U.S. Federal Reserve begins two-day policy meeting
* U.S. crude jumps as winter continues to bite
By Rodrigo Campos
NEW YORK, Jan 28 A global gauge of equity
markets on Tuesday posted its largest gain in nine sessions
ahead of expected measures from Turkey to protect its currency
and help stop a recent run out of emerging markets.
Investors have been shocked in recent days as jitters about
the withdrawal of U.S. monetary stimulus and slowing Chinese
growth have cut into investor confidence in markets from
Istanbul to Kiev to Buenos Aires.
Standard & Poor's cut Ukraine's credit rating further into
"junk" territory on Tuesday, citing escalating political
The Federal Reserve began a two-day meeting, after which it
is expected to trim another $10 billion from the $75 billion it
currently spends each month on buying bonds to support the U.S.
On Wall Street, the S&P 500 closed higher for the first time
in four sessions. Apple shares, however, slid a day after the
largest U.S. company by market value reported quarterly
"Emerging markets are doing poorly and that brings you back
to the U.S. stock market and that's why you are seeing buyers
come in, with the thought the selloff was an opportunity to
re-establish positions," said Rick Meckler, president of
investment firm LibertyView Capital Management in Jersey City,
"I don't think there will be (contagion), absent something
much more material to the investing thesis around the world."
The Dow Jones industrial average rose 90.68 points or
0.57 percent, to 15,928.56, the S&P 500 gained 10.94
points or 0.61 percent, to 1,792.50 and the Nasdaq Composite
added 14.354 points or 0.35 percent, to 4,097.962.
U.S.-dollar denominated Nikkei futures rose 1.1
percent and a gauge of global equities rose 0.4
percent, the most since Jan. 15.
European stocks, and especially those in eastern and
southern Europe, were seen as possible beneficiaries from the
recent flight out of emerging market assets, thanks to improving
growth prospects and still low valuations.
"No need to bottom-fish in emerging markets just yet. We
still find the euro zone recovery theme to be more interesting,"
said JPMorgan European equity strategist Mislav Matejka.
European shares were up the most in nine sessions,
with a 0.6 percent gain.
U.S. Treasuries prices edged up. Data that showed orders for
U.S. durable goods fell in December spurred safe-haven bids, but
nervousness ahead of the Fed's meeting capped gains.
"Traders just want to see what the Fed's going to do," said
George Goncalves, head of U.S. rates strategy at Nomura
Securities International in New York.
Benchmark 10-year notes were last up 6/32 in
price to yield 2.746 percent, compared to 2.766 percent late on
CURRENCIES LESS VOLATILE
Investors poured cash into developing economies when
emergency rate cuts during the financial crisis meant U.S.,
European and other developed-market bonds offered little yield,
comparatively. They are now pulling that money back out as
prospects re-emerge of higher developed-market rates.
The Turkish lira rose for a second day against the
U.S. dollar ahead of the interest-rate decision expected at
midnight in Istanbul (2200 GMT). It was up 1.2 percent at 2.2520
per dollar, compared with a record low of 2.3900 hit on Monday.
A Reuters poll showed analysts expect the Turkish central
bank to lift rates by 225 basis points despite its reluctance to
unsettle Turkish voters ahead of elections this year.
"We think there is room for the central bank to use more
conventional monetary policy and that is clearly what the market
expects," said Fergus McCormick, head of sovereign ratings for
rating agency DBRS.
The lira has risen more than 3 percent in the last two
sessions, which could leave it vulnerable to a selloff after the
central bank's statement.
India surprised markets earlier with a rate hike of its own.
Major currencies weakened against the U.S. dollar after data
showed U.S. consumer confidence rose in January, with Americans
more optimistic about both business conditions and the job
The euro was little changed at $1.3668 and the yen
fell 0.3 percent at 102.87 per dollar.
In support of the single currency, euro zone banks borrowed
enough cash from the European Central Bank on Tuesday to keep
overnight money market rates subdued and quell speculation of
imminent monetary policy easing.
With Turkey expected to raise rates and the hike by India's
central bank, more emerging market central banks are expected to
tighten policy in a bid to stabilize their tumbling currencies.
Brazil, South Africa and Indonesia - some of which have been
dubbed the Fragile Five economies, with a strong reliance on
external capital - are main candidates. South Africa's central
bank meets on Wednesday.
In commodities markets, Brent crude oil climbed 0.7
percent to $107.40 a barrel ahead of an expected drop in U.S.
distillate inventories as consumers burn heating oil during a
bitter northern hemisphere winter. U.S. crude jumped 1.6
percent to $97.26.
Three-month copper ticked down 0.1 percent, its
fifth daily decline in a row, and was trading near its lowest in