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GLOBAL MARKETS-World stock index hits record, dollar softer after Fed
June 19, 2014 / 8:35 PM / 3 years ago

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

* MSCI's ACWI hits all-time high, S&P sets new record close
    * Treasury yields fall to two-week low, later turn higher
    * Oil hits nine-month high above $115 on Iraqi tensions
    * Dollar sags after Fed lowers long-term rate outlook

 (Updates to close of U.S. markets)
    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.
    Wall Street rebounded just before the close, with the S&P
500 again setting a record closing high, a day after the Fed
expressed confidence that 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
0.6 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 after touching a
six-year high.
    The Dow Jones industrial average rose 14.84 points,
or 0.09 percent, to 16,921.46. The S&P 500 gained 2.5
points, or 0.13 percent, to 1,959.48 and the Nasdaq Composite
 dropped 3.51 points, or 0.08 percent, to 4,359.326.
    U.S. Treasuries prices retreated after the government had to
pay more to sell $7 billion in new inflation-protected 30-year
debt and investors reworked positions after the Fed meeting.
    Benchmark 10-year notes fell 3/32 in price to
yield 2.6278 percent.
    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
versus the greenback since October 2008.
    The euro gained 0.07 percent to $1.3604, while the
dollar rebounded against the yen, rising 0.03 percent to
101.94 yen.
    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, Leslie Adler and James Dalgleish)

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