GLOBAL MARKETS-Stocks rise, dollar falls after Fed’s move

* Fed intends to buy $600 bln of bonds by end of Q2 2011

* Stocks, commodities rise after volatile moves

* Dollar, Treasuries fall after Fed’s decision
(Updates with FOMC decision)

By Manuela Badawy

NEW YORK, Nov 3 (BestGrowthStock) – Global stocks rose slightly
and the dollar fell on Wednesday after the Federal Reserve
said it would buy $600 billion more in government bonds by
mid-2011 in an attempt to boost the anemic U.S. economy.

Longer-dated U.S. government bond prices fell sharply and
commodities rose as the dollar’s value weakened ahead of the
Fed’s decision to print more money to buy Treasuries. A flood
of dollars on the market debases the currency’s value.

“All in all, it means more dollars. The debt’s going to
expand. It should lead to a weaker dollar,” said Sterling
Smith, an analyst at Country Hedging Inc, in Minnesota.

“In general, it’s going to be bullish for all commodities.
Any commodity that has a good fundamental story is going to
have legs on this.”

The decision, which takes the Fed into largely uncharted
waters, is aimed at further lowering borrowing costs for
consumers and businesses still suffering in the aftermath of
the worst recession since the Great Depression.

The U.S. central bank said it would buy about $75 billion
in longer-term Treasury bonds per month. It said it would
regularly review the pace and size of the program, and adjust
it as needed, depending on the path of the recovery.

In its post-meeting statement, the Fed described the
economy as “slow,” and said employers remained reluctant to
add to payrolls. It said measures of inflation were “somewhat

“I don’t think the Fed overdelivered. Strictly speaking,
$75 billion a month is less than $100 billion, said Richard
Franulovich, senior currency strategist at Westpac in New

“Some were suggesting that the Fed may change the
‘extended period’ language into an even more extended period,
but the Fed didn’t,” Franulovich added. “And beyond June,
there’s nothing, there is no outlook. I am slightly
underwhelmed. The dollar did sell off, but I don’t think this
spike in the euro has legs.”

The dollar fell against a basket of currencies, with the
U.S. Dollar Index (.DXY: ) down 0.32 percent at 76.477.

The euro (EUR=: ) rose 0.51 percent to $1.4107 after briefly
hitting a session peak of $1.42 immediately after the Fed’s

But the greenback remained higher against the Japanese yen
in volatile trading after the Fed’s statement. The dollar
(JPY=: ) gained 0.81 percent to 81.27.


U.S. stocks (Read more about the stock market today. ) zigzagged in volatile trade after the Fed’s
statement as analysts had already priced in an injection of
around $500 billion by the Fed.

The Dow Jones industrial average (.DJI: ) gained 4.50
points, or 0.04 percent, to 11,193.22. The Standard & Poor’s
500 Index (.SPX: ) rose 1.81 points, or 0.15 percent, to
1,195.38. The Nasdaq Composite Index (.IXIC: ) inched up 0.70
of a point, or 0.03 percent, to 2,534.22 Earlier, the Nasdaq
touched a fresh 52-week intraday high at 2,541.42.

“The Republican victory and quantitative easing are both
net positives for the market, but it’s not surprising that we
would sell on the news,” said Alec Young, equity strategist at
S&P Equity Research in New York. “I don’t think there’s a
break in the trend, however, which remains up.”

The MSCI world equity index (.MIWD00000PUS: ) was up 0.16
percent at 319.79 in late afternoon trading after rising to an
intraday high of 320.42, bringing gains this year to 7.5
percent and posting the strongest level since mid-2008.

In energy and commodities markets, U.S. oil futures (CLc1: )
rose 79 cents, or 0.94 percent, to settle at $84.69 per barrel
— not far below a six-month intraday high of $85.36. In
contrast, spot gold (XAU=: ) fell $12.75, or 0.94 percent, to
$1,344.20 an ounce.

Meanwhile, the 30-year Treasury bond (US30YT=RR: ) sank more
than 2 full points, trading 2-17/32 in price to yield 4.08
percent — the loftiest since early August — and sharply
higher than 3.94 percent late on Tuesday.

The benchmark 10-year U.S. Treasury note (US10YT=RR: )
slipped 4/32, with the yield rising to 2.607 percent. The
2-year U.S. Treasury note (US2YT=RR: ) was up 1/32, with the
yield at 0.34 percent.
(Reporting and writing by Manuela Badawy; Additional
reporting by Ryan Vlastelica, Pedro da Costa, Chris Reese and
Wanfeng Zhou; Editing by Jan Paschal)

GLOBAL MARKETS-Stocks rise, dollar falls after Fed’s move