* Federal Reserve meeting eyed for any extra stimulus
* Gold hits all-time high on Fed speculation
* Dollar eases against major currencies
* Stocks add to gains after housing data
By Walter Brandimarte and Emelia Sithole-Matarise
NEW YORK/LONDON, Sept 20 (Reuters) - The dollar slipped and
world stocks rose on Monday as the possibility the Federal
Reserve could signal further economic stimulus spurred demand
for higher-yielding assets.
Expectations of further monetary easing drove the S&P 500
to a four-month high, above a key technical level -- a possible
sign of more gains ahead.
Gold hit an all-time high on speculation the Fed may
announce on Tuesday a move toward further monetary easing,
which added fuel to the precious metal's drive higher.
Prices of long-dated U.S. Treasuries climbed before the
Fed's monetary policy meeting on Tuesday when policymakers
could hint on the conditions for future purchases of government
debt.
"There is plenty of pressure on the Fed to put forward what
they are going to do to stop the U.S. going into a double-dip
recession. It will be the main focus of the week and the market
could go either way. We expect trading to be quite volatile,"
said Will Hedden, sales trader at IG Index.
The Fed is not expected to make any new monetary policy
moves, but the post-meeting statement will be closely
scrutinized for signals on the debate about whether further
large-scale asset purchases are needed to support the sluggish
recovery.
Further supporting the case for more monetary easing was an
index of U.S. home-builder sentiment, which held steady in
September against a forecast of a small uptick. For details,
see [].
"The housing market data basically continues (to be) weak,"
said Kathy Lien, director of currency research at GFT in New
York. "The housing market is one of the most troubling aspects
of the U.S. economy and one of the main reasons why the Federal
Reserve is considering additional quantitative easing."
U.S. stocks added to gains after the housing data.
The Dow Jones industrial average <> rose 102.17 points,
or 0.96 percent, to 10,710.02, while the Standard & Poor's 500
Index <.SPX> gained 10.71 points, or 0.95 percent, to 1,136.30.
The Nasdaq Composite Index <> climbed 25.59 points, or
1.11 percent, to 2,341.20.
European shares rebounded, with the FTSEurofirst index
<> advancing 1.28 percent. Investors pushed aside for now
concerns about Ireland's shaky banking sector, which had rocked
markets on Friday.
The MSCI All-Country World index <.MIWD00000PUS> climbed
0.99 percent, while the MSCI Emerging Market stock index
<.MSCIEF> was 0.64 percent higher.
DOLLAR SLIPS
Prospects of more quantitative easing, often seen as
negative for currencies, caused the U.S. dollar to weaken 0.22
percent against major currencies, according to a benchmark
index <.DXY>.
The euro <EUR=> rose 0.24 percent to $1.3076. Against the
Japanese yen, the dollar <JPY=> was down 0.12 percent at 85.74.
Japan intervened to sell yen for the first time in six
years last week, partially interrupting a decline in the dollar
that began when talk revived last month of the U.S. central
bank opting for further quantitative easing -- effectively
printing money.
The Australian dollar hit a two-year high after hawkish
comments from a policymaker.
The Aussie <AUD=> rose more than 1 percent earlier to
$0.9469, its strongest since mid-2008, after Reserve Bank of
Australia Governor Glenn Stevens suggested Australian interest
rates would rise further.
Gold, which tends to benefit from economic uncertainty
because many investors see it as a safe-haven asset, rose as
high as $1,283.70 an ounce, eclipsing the previous all-time
peak of $1,282.75 struck on Friday.
U.S. crude oil futures, which fell almost 4 percent last
week, rose 98 cents, or 1.33 percent, to $74.64 per barrel.
(Additional reporting by Angela Moon, Ellen Freilich and
Vivianne Rodrigues; Editing by Kenneth Barry)
