GLOBAL MARKETS-U.S. stocks rise as bond yields ease, dollar slides


* Dow, S&P hit record closing highs on views on Fed

* Dollar slides on comments on keeping Fed stimulus in place

* Treasury yields ease before Yellen's Senate appearance

* Oil gains after flirting with 4-1/2-month low

* Gold breaks four-day drop

By Ellen Freilich

NEW YORK, Nov 13 (Reuters) - U.S. stocks rose while Treasuryyields and the dollar fell on Wednesday on expectations thatremarks by Federal Reserve Vice Chair Janet Yellen when sheappears on Thursday at the Senate Banking Committee willunderscore the Fed's accommodative posture.

Opening remarks for Yellen's appearance at the committee fora confirmation hearing on her nomination to head up the Fed,released late Wednesday, gave substance to those expectations,boosting stock futures and bond prices while the dollar extendedits slide.

In her remarks, Yellen, who President Barack Obama nominatedto take over as Fed chairman when Ben Bernanke's term ends inJanuary, said the U.S. central bank "has more work to do" tohelp an economy and labor market that still are underperforming.

The U.S. benchmark 10-year Treasury yield easedto 2.70 percent after Yellen's remarks were released.

The hearing by the Senate Banking Committee, which involvesa question-and-answer period as well as opening remarks, is setfor 10 a.m. (1500 GMT) on Thursday.

"The Fed is going to remain easy and will probably taperlater rather than sooner. There were enough question marks inthe October employment report and even the recent GDP reportthat Yellen is not going to want to change direction veryquickly," said Bob Gelfond, chief executive officer of MQSManagement, a New York City-based investment advisor.

Most dealers who underwrite U.S. Treasury issuance think theFed will not start to trim its bond purchases until March 2014or later, according to a Reuters poll done Friday after therelease of the October U.S. employment data.

As the Fed continues to buy $85 billion a month in U.S.Treasuries and mortgage-backed securities, the Treasury's $24billion 10-year note auction was well received on Wednesday.

The Treasury will sell $16 billion of 30-year bonds onThursday.

Earlier Wednesday, global equity markets had slipped onweaker-than-expected data from the euro zone and on someinvestors' disappointment with the communique from China's thirdplenum. On Wall Street, stocks opened lower in line with thatovernight trend before moving into the plus column.

Department store operator Macy's Inc reported arebound in third-quarter sales and said its business wasimproving as the holiday season nears, adding to the positivetone on Wall Street. Shares of Macy's reached a record closinghigh, finishing up 9.4 percent at $50.68, and helping to driveup other consumer discretionary shares.

"Macy's reported blowout numbers. It's had a positive impacton everything else consumer related today. I think people'sexpectations were pretty low for holiday shopping, and I thinkthat woke a lot of people up," said Michael James, managingdirector of equity trading at Wedbush Securities in Los Angeles.

The Dow Jones industrial average closed up 70.96points, or 0.45 percent, at 15,821.63. The S&P 500 closedup 14.31 points, or 0.81 percent, at 1,782.00. the Nasdaq closed up 45.655 points, or 1.16 percent, at 3,965.575.


Doubts about the euro zone's recovery and the lifespan ofBritain's record-low interest rates hurt stock prices there andin the euro zone.

Britain's FTSE took its biggest fall in over a monthand Europe's FTSEurofirst tumbled 0.56 percent as signsof a strengthening UK economy but worse-than-expected euro zonefactory data hit markets from opposing sides.

Investors have been buying U.S. and European assets on theview that both regions' economies are recovering, but notstrongly enough to let central banks reduce stimulus.

China's CSI300 share index fell 2.2 percent, itsbiggest loss in four months. China's leaders, after a four-dayplenum, left markets unimpressed with their reform agenda.

"There's a sense of dissatisfaction with the Third Plenum,though investors shouldn't have expected too many details," saidBrian Jacobsen, chief portfolio strategist at Wells Fargo FundsManagement in Menomonee Falls, Wisconsin. "And there is agrowing fear that the euro zone may go the way of Japan in the1990s and 2000s with deflation and dismal growth."


The dollar first rose against the euro on news the EuropeanCentral Bank could start to buy assets or cut its deposit rateinto negative territory to push inflation up to its target.

But it slid as sentiment focused on the prospect for a longperiod of easy monetary policy from the Federal Reserve.

Fed officials this week have spoken of the need to keep theU.S. central bank's economic stimulus in place, and Yellen isexpected to take a similar stance.

The euro, however, was resilient, rising even thoughEuropean Central Bank Executive Board member Peter Praet saidthe ECB could start buying assets or cut its deposit rate intonegative territory to trigger a rise in inflation to the centralbank's target.

In afternoon trade, the dollar index was down 0.3percent, led by gains in the euro, which rose 0.2 percentto $1.3463.

MSCI's emerging market index lost about 1.2percent as it notched its 10th straight session of falls and hitits lowest levels since mid-September.

In commodities markets, gold stood at $1,273.06 anounce. U.S. crude for December delivery rose $0.75 to$93.77 a barrel after flirting with 4-1/2-month lows, whileBrent gained $1.31 to $107.12. Oil was helped as supplyoutages countered concerns about reduced U.S. monetary stimulusand a forecast rise in U.S. stockpiles.

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