* European stocks gain on earnings, U.S. stocks slip
* Dollar slips on speculation of increased Fed easing
* Oil gains after jobs data, focus remains on Fed
* Surprise drop in weekly U.S. jobless claims
(Adds U.S. markets, changes byline, dateline from LONDON)
By Herbert Lash
NEW YORK, Oct 28 (Reuters) - Global stocks rose despite a
slide in U.S. equity markets after upbeat corporate results in
Europe boosted sentiment, while the dollar fell on speculation
of greater-than-expected U.S. monetary easing next week.
Oil prices initially rose on news of an unexpected drop in
weekly U.S. jobless claims, a positive signal on the health of
the U.S. economy before the Fed's widely anticipated meeting
next week. For details see []
Investors shied away from big bets ahead of the two-day Fed
meeting, which will end on Wednesday and is expected to unveil
a new program of monetary easing aimed at lifting asset prices
and increasing growth.
A New York Federal Reserve survey of dealers and investors
on the size of the stimulus program included scenarios of up to
$1 trillion, a figure larger than recent estimates.
[]
The drop in claims for unemployment benefits gave U.S.
equities an early gain as did a weak dollar, but the inverse
relationship between the U.S. currency and stocks appeared to
break down. Mixed earnings also added to the choppy action.
[] []
"The more the market goes up, the more apprehensive
investors are to continue to add risk," said Alan Lancz,
president at Alan B. Lancz & Associates Inc in Toledo, Ohio.
In the face of the looming Fed statement and U.S. elections
on Tuesday, investors "may prune some risk and take some
profits as the market has appreciated quite a bit over the past
two months," Lancz said.
The Dow Jones industrial average <> was down 60.24
points, or 0.54 percent, at 11,066.04. The Standard & Poor's
500 Index <.SPX> was down 3.62 points, or 0.31 percent, at
1,178.83. The Nasdaq Composite Index <> was down 11.37
points, or 0.45 percent, at 2,491.89.
But European shares <> rose on a flurry of upbeat
earnings, led by oil and gas companies. But declines in
chemical stocks limited gains after Solvay <SOLB.BR> slid on
weak results. []
The pan-European FTSEurofirst 300 <> index of top
shares closed 0.5 percent higher at 1,086.74 points.
"This is the sixth earnings season where the surprises have
by far outweighed the non-surprises and this is very good news
for the equity market," said Lothar Mentel, chief investment
officer at Octopus Investments.
The euro <EUR=> gained 1.10 percent at $1.3919 as the
dollar slipped. A recent move to trim extreme short dollar
positions amid speculation the Fed will announce plans to buy
more assets next week, also slowed. []
The dollar was down against a basket of major currencies,
with the U.S. Dollar Index <.DXY> down 1.08 percent at 77.305.
Against the Japanese yen, the dollar <JPY=> was down 0.87
percent at 80.98.
Gold rose back above $1,330 an ounce as fresh dollar
weakness reversed the previous session's decline, but trading
was cautious ahead of the Fed meeting. []
Spot gold prices <XAU=> rose $16.66 to $1,341.40.
The crude market was supported by oil companies Shell
<RDSa.L> and Eni <ENI.MI> beating analyst forecasts with sharp
gains in third-quarter profits, boosted by higher oil and gas
prices. []
But oil prices eased, with U.S. light sweet crude oil
<CLc1> falling 11 cents to $81.83 per barrel.
In the bond market, doubts about the aggressiveness of the
Fed's plans encouraged some price-cutting this week, pushing
yields high enough to draw buyers back into the market.
But some of the doubts appeared to dissipate Thursday amid
talk of eventual Fed purchases of up to $1 trillion.
Ten-year yields above 2.70 percent attracted buyers. The
10-year Treasury note <US10YT=RR> rose 13/32 in price to yield
2.68 percent.
The MSCI index of Asia Pacific stocks outside Japan rose
0.7 percent <.MIAPJ0000PUS> after a nearly 2 percent slide the
day before. Japan's Nikkei stock average <>, which was
spared the sell-off, slipped 0.2 percent to a six-week low.
(Reporting by Leah Schnurr, Nick Olivari, Ellen Freilich in
New York; Harpreet Bhal, Zaida Espana, Isabel Coles and Jan
Harvey in London; Writing by Herbert Lash; Editing by Kenneth
Barry)
