* U.S. Fed widely expected to pare bond purchases by $10 bln
* Analysts see Fed's Yellen tweaking forward guidance on
* Dollar rises against yen and euro
(Adds quote, recasts lead; dateline previously LONDON)
By Angela Moon
NEW YORK, March 19 The world's major stock and
bond markets were little changed on Wednesday as investors
awaited comments from Federal Reserve Chair Janet Yellen at the
conclusion of the Fed's two-day policy meeting.
The U.S. central bank is expected to trim its bond-buying
stimulus by $10 billion a month for a third time in a row on
Wednesday, as well as update its guidance on when interest rates
will eventually rise. The Fed statement is due at 2 p.m. (1600
GMT) followed by a press conference by Yellen at 2:30 p.m.
A policy decision to steadily scale back stimulus, while
likely noting the economy's recent weakness is not solely down
to harsh winter weather, should soothe any concerns investors
might have had surrounding Yellen's first policy-setting meeting
as the Fed chief.
The shift in focus to the Fed and away from geopolitical
concerns over Russia and Ukraine put a floor under stocks, which
had opened lower following a strong start to the week.
"The Fed is taking control of everyone's attention today,"
said Mike Cullinane, head of Treasuries trading at D.A. Davidson
in St. Petersburg, Florida. "It's pretty assured they will
continue to taper, probably by another $10 billion."
U.S. government debt prices were little changed. The
benchmark 10-year Treasury notes were unchanged in
price, with a yield of 2.681 percent, just above the 200-day
moving average of 2.679 percent, according to Reuters data.
On Wall Street, the S&P 500 was within striking distance of
all-time highs, though a selloff in shares of Oracle Corp
weighed on the tech sector.
FedEx Corp, considered an economic bellwether
because of the massive volume of goods it ships around the
world, also sounded a sour note in its outlook.
The Dow Jones industrial average rose 14.23 points,
or 0.09 percent, to 16,350.42. The S&P 500 gained 0.6
points, or 0.03 percent, to 1,872.85, and the Nasdaq Composite
dropped 6.57 points, or 0.15 percent, to 4,326.743.
The pan-European FTSEurofirst 300 index was up 0.25
percent at 1,309.4 points, marking a third straight day of
Germany's DAX was up 0.7 percent at 9,308 points,
boosted by a 7 percent surge in shares of BMW, making
the stock Europe's biggest gainer. The automaker said it expects
profits to rise this year.
DOLLAR UP AHEAD OF FED STATEMENT
The dollar got a lift from expectations the Federal Reserve
will look beyond the drag of a harsh winter on America's economy
and keep unwinding its monetary stimulus, though the dollar's
gains against the euro and yen were held back by some
trepidation before Yellen's inaugural policy review as Fed
chief, traders said.
The dollar edged up 0.13 percent against the yen, to 101.55
yen, staying above a one-month low of 101.20 yen hit on
The euro fetched $1.3916, down 0.14 percent on the
day but not far from last Thursday's 2-1/2-year high of $1.3967.
The dollar index was up at 79.49, a gain of 0.09
"The key thing will be whether there will be any change in
the timing of rate hikes by the Fed from next year," said Jeremy
Stretch, head of currency strategy at CIBC World Markets.
"I am not convinced the Fed is ready to materially change
guidance and we will see a very even-handed Yellen. All of which
leaves investors looking to second-quarter U.S. data before
taking fresh positions in the dollar."
Oil fell to around $106 a barrel on Wednesday, reaching a
six-week low, as concerns eased about an escalation of the
Ukraine crisis and on a larger-than-expected rise in U.S. crude
Brent was down 75 cents at $106.04 a barrel after
reaching an intra-day low of $105.81, the lowest since Feb. 5.
U.S. crude rose 45 cents to $100.15.
(Reporting by Angela Moon; Editing by Leslie Adler)