GLOBAL MARKETS-Dollar slips; stocks, gold up on Fed speculation

                                
 * 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
 (Updates with European markets' close)
                                
 By Walter Brandimarte
                                
 NEW YORK, Sept 20 (Reuters) - World stocks jumped and the
dollar slipped on Monday as investors speculated the Federal
Reserve could signal further economic stimulus, supporting
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 move
that analysts consider a sign of more gains ahead.
                                
 Gold hit record highs for the fourth consecutive day,
benefiting from dollar weakness and concerns that any
additional stimulus could prove inflationary.
                                
 Prices of long-dated U.S. Treasuries rose 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 right now, 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 [ID:nWALKKE6KD].
                                
 "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 <.DJI> gained 95.59
points, or 0.90 percent, at 10,703.44, while The Standard &
Poor's 500 Index <.SPX> rose 10.42 points, or 0.93 percent, to
1,136.01. The Nasdaq Composite Index <.IXIC> was up 21.19
points, or 0.92 percent, at 2,336.80.
                                
 European shares rebounded, with the FTSEurofirst index
<.FTEU3> closing 1.35 percent higher on hopes that the economy
will not slip back into recession.
                                
 Energy companies Total <TOTF.PA>, ENI <ENI.MI>, BP <BP.L>
and Royal Dutch Shell <RDSa.L> rose between 2 and 2.9 percent,
as crude oil prices rose more than 1 percent.
                                
 The MSCI All-Country World index <.MIWD00000PUS> climbed
0.96 percent, while the MSCI Emerging Market stock index
<.MSCIEF> was 0.59 percent higher.
                                
 DOLLAR SLIPS, AUSSIE JUMPS
                                
 Prospects of more quantitative easing, often seen as
negative for currencies, caused the U.S. dollar to weaken 0.21
percent against major currencies, according to a benchmark
index <.DXY>.
                                
 The euro <EUR=> gained 0.25 percent to $1.3077. Against the
Japanese yen, the dollar <JPY=> was down 0.19 percent at 85.68.
                                
 The yen has been trading at a tight range since the Bank of
Japan intervened in the foreign exchange market last week to
stem further currency appreciation.
                                
 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 <XAU=>, 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.
                                
 Analysts said prices of the metal were also propped up
investors trying to hedge against the weakening of the dollar
and possible inflationary effects of the Fed's ultra-loose
monetary policy.
                                
 "All the stories stack up hugely in favor of gold
currently," said Saxo Bank senior manager Ole Hansen. "A move
higher to between $1,300-$1,350 could be a good target towards
year-end, but it will come in steps."
                                
 U.S. crude oil futures <CLc1>, which fell almost 4 percent
last week, rose $1.30, or 1.76 percent, to $74.96 per barrel
 (Additional reporting by Angela Moon, Ellen Freilich, Jan
Harvey, Vivianne Rodrigues and Brian Gorman)