* Global stocks up for third day in a row
* Europe gains 1.7 percent, Japan 0.5 percent
* Dollar generally weaker, euro up nearly 1 percent
* Fed meeting in focus
By Jeremy Gaunt, European Investment Correspondent
LONDON, Jan 28 (Reuters) - World stocks gained for the
third day in a row on Wednesday after reassuring corporate
results on Wall Street while a Federal Reserve meeting later in
the day was eyed for possible new actions on the credit crisis.
The dollar was generally weaker against most currencies,
with the euro rising nearly 1 percent.
European shares opened sharply higher with the FTSEurofirst
300 index <> up 1.7 percent, driven higher by banking and
energy stocks. Japan's Nikkei <> gained 0.56 percent a day
after jumping 4.9 percent.
The main driver was a series of modestly positive earnings
results from Wall Street overnight.
American Express <AXP.N>, for example, posted a quarterly
profit that surpassed analysts' forecasts and chip maker Texas
Instruments' <TXN.N> quarterly profit fell less than feared.
"Yahoo <YHOO.O> had in-line sales after the close in the
U.S. and a lot of other companies' results have not been as bad
as expected which is probably creating a more positive
atmosphere," said Bernard McAlinden, market strategist at NCB
Stockbrokers in London.
Earnings disappointments, however, remain a major concern
for investors. Swiss wealth manager Sarasin said on Wednesday
that global estimates still need to fall by 10 percent to 20
percent.
"Most companies are going to deliver results that will be
even worse than the estimates which have already been
significantly downgraded," it said in a note.
But Sarasin also forecast rises in U.S. and European stock
market indexes of 25 percent to 30 percent by year-end.
FED MEETS
The Fed's meeting was also in focus. On Tuesday, the U.S.
central bank took a step toward easing mortgage foreclosures,
announcing it would write down troubled mortgages to keep people
in their homes.
The Fed concludes a two-day policy meeting later in the day
and with the benchmark interest rate already near zero, the
market is looking for any new policy measures, such as
purchasing long-dated Treasuries.
"If the Fed makes comments on purchasing Treasuries, it
would soothe concerns that overseas investors may start picking
up fewer U.S. bonds," said Hideki Hayashi, chief economist at
Shinko Securities.
The euro rose 0.9 percent against the dollar <EUR=> to
$1.3294 and by 1.1 percent versus the yen <EURJPY=R> to 118.51
yen. The dollar also gained 0.3 percent against the yen <JPY=>
to 89.11 yen.
Britain's pound <GBP=> continued to recover versus the
dollar after its slump to a 23-year low last week, rising 0.9
percent to a one-week high of $1.4299. The pound was flat
against the euro <EURGBP=>.
On bond markets, two-year Schatz yields <EU2YT=RR> edged up
1.4 basis points to 1.690 percent, while 10-year Bunds yielded
<EU10YT=RR> 3.274 percent, up 1 basis point.
(To read Reuters Global Investing Blog click on
http://blogs.reuters.com/globalinvesting; for the MacroScope
Blog click on http://blogs.reuters.com/macroscope)
(Additional reporting by Joanne Frearson; Editing by Toby
Chopra)
