* Global stocks rise 0.5 pct, helped by solid earnings
* Dollar turns lower; markets remain uncertain on Fed QE
* Expectations for Fed decision next week vary widely
By Jessica Mortimer
LONDON, Oct 28 (Reuters) - Strong corporate earnings lifted
global stocks on Thursday while the dollar fell, paring recent
gains, as uncertainty over how much monetary easing the Federal
Reserve will opt for next week kept investors cautious.
Forecast-beating earnings, including from Royal Dutch Shell
<RDSz.L>, and gains in mining and technology stocks helped lift
European shares <> 0.6 percent after doubts over the U.S.
stimulus had pushed them to a two-week closing low on Wednesday.
Global stocks were higher, with the MSCI world equity index
<.MIWD00000PUS> up 0.4 percent after falling on Wednesday. U.S.
stock futures <SPc1><DJc1> also pointed to a higher opening on
Wall Street.
Investors awaited the latest weekly reading of U.S.
unemployment at 1230 GMT for clues about the health of the
world's largest economy before Wednesday's Fed decision.
"Sentiment seesaws between the positive corporate outlook in
the short term ... and the dark macro environment with the
potential for further storms ahead. Volatility continues to be
the name of the game," said Henk Potts, equity strategist at
Barclays Wealth.
Market participants have scaled back expectations for the
extent of Fed QE likely next week in recent days, pushing the
dollar and U.S. Treasury yields higher.
There is a great deal of uncertainty surrounding the Fed
decision, however. The latest Reuters poll showed economists'
estimates for how much money the Fed will print varied widely,
from $250 billion to as high as $2 trillion. []
DOLLAR PARES RECENT GAINS
The dollar index <.DXY>, which measures the dollar's value
against a basket of major currencies, was down 0.7 percent at
77.630, with a short covering rally pausing as uncertainty over
Fed easing left investors wary. The euro <EUR=> rose 0.6
percent, while the dollar fell nearly 0.5 percent versus the yen
<JPY=>.
"Interest rate differentials had stopped moving against the
dollar, but today the dollar is giving up a bit of those gains,"
said Marcus Hettinger, global currency strategist at Credit
Suisse in Zurich.
"We're seeing some consolidation in the dollar before the
Fed meeting as no one knows how much QE the Fed might do."
German bund futures <FGBLc1> started the day higher but
pulled back to trade up 4 ticks at 128.85 after solid demand at
an auction of Italian debt. Concerns about the health of some
peripheral euro zone economies, however, widened the spreads
between the bond yields of those countries and those of Germany.
Government talks with the opposition in Portugal over the
budget broke down on Wednesday, while there were signs Ireland
was preparing to cut public spending even further.
U.S. 10-year Treasury yields <US10YT=RR> slipped from late
U.S. trade, after reaching their highest since Sept. 20 on
Wednesday.
Gold prices <XAU=> rose slightly to $1,329.00 an ounce,
against $1,324.70 late in New York, helped by a weaker dollar.
U.S. crude oil <CLc1> gained 20 cents to $82.14 a barrel
after falling nearly 1 percent on Wednesday.
Emerging stocks <.MSCIEF> were up 0.3 percent.
(Additional reporting by Atul Prakash and Naomi Tajitsu;
Editing by Catherine Evans)
