* Stocks edge higher in anticipation of Fed's meeting
* Dollar firmer before Fed meeting, tone stays defensive
* Oil rises above $81 as earlier weak dollar supports
* Bonds ease ahead of planned $74 bln auction this week
(Updates with U.S. market, changes byline, dateline from
previous LONDON)
By Herbert Lash
NEW YORK, Aug 9 (Reuters) - Global stocks and the dollar
edged higher on Monday on expectations the U.S. Federal Reserve
will signal this week it is prepared to print more money to
prop up an anemic U.S. economy.
Weaker-than-expected U.S. jobs data in July, released last
Friday, fanned speculation the Fed may soon buy U.S. debt to
support an economy that is showing signs of falling back into
recession and to fight potential deflation.
The dollar edged higher against major currencies as
investors were reluctant to place big bets ahead of a Fed
policy-setting meeting on Tuesday. For details see:
[]
Trading was limited as market participants refrained from
chasing prices aggressively, with many traders already pricing
in some form of modest easing.
"The weak non-farm payrolls data before a Fed meeting is
giving further confidence to the bond market's belief that the
Fed will play to its dual mandate of both caretaker of the job
market and advocate for price stability," said George
Goncalves, head of U.S. rates strategy at Nomura Securities in
New York.
U.S. stocks gained, but the Dow was weighed by shares of
Hewlett-Packard Co <HPQ.N>, off 8.2 percent. The company said
its chief executive quit after an investigation found he
falsified expense reports to conceal a "close personal
relationship" with a female contractor.
"Today's trade is all about anticipation of tomorrow. The
main question is will the Fed throw another quantitative easing
bombshell, and according to that, people are either buying or
waiting on the sidelines," said John Canally, economist at LPL
Financial in Boston.
MSCI's all-country world index <.MIWD00000PUS> rose 0.3
percent.
On Wall Street, the Dow Jones industrial average <> was
up 23.31 points, or 0.22 percent, at 10,676.87. The Standard &
Poor's 500 Index <.SPX> was up 1.82 points, or 0.16 percent, at
1,123.46. The Nasdaq Composite Index <> was up 6.75
points, or 0.29 percent, at 2,295.22.
Stocks in Europe and Asia rose as investors grabbed riskier
assets on expectations the Fed may inject extra stimulus to
maintain a recovery. []
European stocks advanced 1.2 percent after data showed
German exports should approach record levels next year after
beating forecasts in June, another sign that foreign demand is
driving a stronger-than-expected recovery in Europe's largest
economy.
Exports rose 3.8 percent, the Federal Statistics Office
said, and analysts said the figure underpinned expectations
that gross domestic product data due this week would show
growth accelerated in the second quarter. []
Treasuries were having a hard time attracting any
safe-haven buying on Monday however, with benchmark yields
hovering near 15-month lows.
The benchmark 10-year U.S. Treasury note <US10YT=RR> was
down 2/32 in price to yield 2.83 percent.
Oil climbed above $81 a barrel, extending last week's 2
percent rise on earlier weakness in the dollar and tensions
between the West and Iran. []
U.S. light sweet crude oil <CLc1> rose 48 cents to $81.18 a
barrel.
Gold rose as uncertainty hit the market ahead of the U.S.
Fed meeting. Spot gold prices <XAU=> rose 10 cents to $1,204.40
an ounce. []
The MSCI index of Asia Pacific ex-Japan equities rose 0.8
percent <.MIAPJ0000PUS> to its highest since May 4. Japan's
Nikkei share average <> fell 0.7 percent, however, due to
the negative impact of a stronger yen on exporters.
(To read Reuters Global Investing Blog click on
http://blogs.reuters.com/globalinvesting; for the MacroScope
Blog click on http://blogs.reuters.com/macroscope; for Hedge
Fund Blog click on http://blogs.reuters.com/hedgehub)
(Reporting by Angela Moon, Wanfeng Zhou and Chris Reese in
New York; David Sheppard and Atul Prakash in London; writing by
Herbert Lash; editing by Jeffrey Benkoe)
