GLOBAL MARKETS-Shares drift, dollar dips ahead of Fed decision

Reuters

* Below-forecast U.S. jobs data supports dovish Fed

* World equities index hits highest in almost six years

* Brent up on Libya concern, WTI drops on U.S. inventories

By Rodrigo Campos

NEW YORK, Oct 30 (Reuters) - A gauge of global shares roseto its highest in almost six years on Wednesday on expectationsthat the Federal Reserve will keep its current stimulus programintact, while the U.S. dollar edged lower, giving support togold and copper prices.

Many traders expect the U.S. central bank to signal later inthe day, at the end of a two-day policy-making meeting, that itplans to keep in place a stimulus program that has liftedequities and other risk assets, and boosted Treasury bond priceswhile weighing on the U.S. currency.

Spot gold rose the most in a week after soft U.S. jobs datasupported an expectation that the Fed will keep its $85 billiona month in bond purchases in place, in a bid to spark life intoa lackluster economic recovery.

Data showed U.S. private-sector employers hired the fewestworkers in six months in October, and that tepid domestic demandkept inflation benign last month, suggesting the economy wasstill in need of stimulus.

On Wall Street, the S&P 500 hit a fresh intraday record butindexes edged lower ahead of the Fed statement on its policydecision, expected at 2:00 p.m. EDT (1800 GMT).

Analysts warned that any hint that the Fed could trim backstimulus in the near future could prompt a negative marketreaction, and noted that the recent rally had stretchedvaluations to a point that could encourage some profit-taking.

"I don't think anybody expects any surprise coming out ofthe Federal Reserve's meeting, everybody is just stepping backto make sure," said Hugh Johnson, chief investment officer ofHugh Johnson Advisors LLC in Albany, New York.

The Dow Jones industrial average fell 15.62 points,or 0.1 percent, to 15,664.73, the S&P 500 lost 3.85points, or 0.22 percent, to 1,768.1 and the Nasdaq Composite dropped 13.25 points, or 0.34 percent, to 3,939.088.

Europe's broad FTSEurofirst 300 index reached itshighest since mid-2008, buoyed by earnings, including those ofVolkswagen and clothing retailer Next,before dipping less than 0.1 percent towards the close.

The MSCI world equity index hit an intradaylevel not seen since early 2008 and was last unchanged for theday.

DOLLAR DIPS WHILE GOLD, COPPER JUMP

Data showing that U.S. private-sector employers added130,000 jobs in October, below expectations for a rise of150,000, hurt the U.S. currency. The dollar dipped less than 0.1percent against a basket of major currencies aftergaining nearly 0.5 percent on Tuesday.

"The private sector jobs data reflects a labor market thatshifted to lower gear in recent months and feeds into forecaststhat the Fed will hold off on tapering until late in the firstquarter of 2014," said Omer Esiner, chief market analyst atCommonwealth Foreign Exchange in Washington D.C.

Dollar sellers had driven the U.S. currency to nine-monthlows by the end of last week, taking their lead from a steadydecline in U.S. Treasury yields as investors anticipated andextended the period of Fed bond buying.

The 10-year Treasury note last traded up 9/32 inprice with a yield of 2.4763 percent, near a three-month low of2.471 percent hit last week.

The euro edged up 0.2 percent to $1.3768 afterdropping the most in three weeks on Tuesday.

Spot gold rose the most in a week, also on expectations theFed will keep buying bonds and pressuring the dollar. Gold was last up 0.8 percent near $1,354 an ounce.

Copper prices jumped 1.3 percent to $7,293 a ton.

Brent crude rose 0.4 percent to $109.44 a barrel asexport disruptions in Libya continue to cut supplies to Europeand Asia, while the benchmark U.S. contract fell 1.2percent to $97 a barrel after a bigger-than-expected increase ininventories in the United States.

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