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GLOBAL MARKETS-S&P at record ahead of Fed meeting, euro rises

* Euro up on ECB official's comments

* Brent dips, holds near $109 as Libyan output stays low

* Markets keep tight ranges as Fed decision looms

By Rodrigo Campos

NEW YORK, Oct 29 (Reuters) - The S&P 500 hit a record on Tuesday, leading global shares higher ahead of a Federal Reserve meeting on the future of its stimulus program, while the euro neared a two-year high against the U.S. dollar.

Brent crude gave back some of Monday's gains but hovered near $109 as Libya's output stayed low, while other markets traded in tight ranges. Most investors expect the U.S. central bank will vote to extend the current $85 billion monthly bond-buying stimulus into next year.

Markets were thrown for a loop in mid-September, when the expectation was high for the Fed to start trimming its monthly purchases, aimed at fueling recovery.

Although many are wary of surprises when the Fed publishes a statement after its two-day meeting on Wednesday, most see the recent rally in riskier assets and a dollar selloff as largely factoring in the decision.

On Wall Street, stocks rose modestly at the open, with the S&P 500 hitting an intraday record high for a third straight day.

"There's a lot of buyer's fatigue in the market right now. We're up more than 20 percent this year, markets have been through a lot and we're sitting at all-time highs. No one wants to over-commit in that environment," said Oliver Pursche, president of Gary Goldberg Financial Services in Suffern, New York.

The Dow Jones industrial average rose 56.29 points, or 0.36 percent, at 15,625.22. The Standard & Poor's 500 Index was up 5.26 points, or 0.30 percent, at 1,767.37. The Nasdaq Composite Index was up 3.91 points, or 0.10 percent, at 3,944.04.

MSCI's world equity index edged up 0.1 percent, trading within last week's range.

In Europe, BP and Saipem were among the top gainers on the FTSEurofirst 300 index, which was up 0.2 percent.


The euro hit a session high at $1.3813, near a two-year high of $1.3832 hit Friday, after the European Central Bank's Ewald Nowotny said he does not see any tool the ECB could use to weaken the eurozone's currency.

The euro was up 0.2 percent at $1.3808, though the upcoming Fed policy decision remained however as the dominant factor in the currency and fixed income markets.

The dollar gained 0.15 percent against a basket of currencies to 79.365 on thin volume, as many players withdrew from the market ahead of the Fed meeting.

U.S. Treasuries prices were little changed as mildly encouraging data on housing and retail sales reduced bids for bonds, although yields remained close to three-month lows.

"The market is directionless. There is no urgency to push yields higher or lower," said Lou Brien, market strategist at DRW Trading in Chicago.

The light trading volume suggested traders were reluctant to make big bets ahead of the Fed meeting and as the Treasury Department sought to sell $96 billion in coupon-bearing debt this week.

Benchmark 10-year Treasury notes were down 2/32, the yield at 2.5179 percent.

Spot gold, which has risen almost 8 percent from a three-month low in mid October, fell 0.1 percent to around $1,350 an ounce.

Brent crude fell 0.7 percent to $108.88 a barrel, though traders said this was a consolidation after a 2.5 percent gain the previous day, when reports of a sharp drop in Libyan oil exports rekindled worries over global supply. U.S. crude was off 0.4 percent at $98.28.

Libya's crude oil exports have dropped to less than 10 percent of capacity as the government has struggled to reach a deal with protesters blocking its big eastern facilities, with some demanding a greater share of the oil wealth.