(Updates prices)
* Nasdaq closes at record high, up 0.5%
* MSCI World Index hits record high, up 0.6%
* S&P 500 up 0.2%
* Fed vows to keep benchmark interest rate near zero
* Dollar recovers some of earlier losses
By Matt Scuffham
NEW YORK, Dec 16 (Reuters) - Global stocks hit record highs
on Wednesday as growing hopes of deals on U.S. fiscal stimulus
and Brexit and the Federal Reserve's pledge to keep its
benchmark interest rate near zero offset concerns over the
economic impact of COVID-19.
The U.S. central bank promised to keep funneling cash into
financial markets further into the future to fight the
recession. "It's a positive statement," said Quincy Krosby, chief
market strategist at Prudential Financial. "They've married a
positive projection for next year with the intention to keep an
accommodative and ultra-dovish stance until they are certain the
economic recovery has taken hold."
U.S. stocks gained after the Fed's statement.
The Nasdaq Composite .IXIC closed at a record high, adding
63.13 points, or 0.5%, to 12,658.19. The S&P 500 .SPX gained
6.55 points, or 0.18%, to 3,701.17. The Dow Jones Industrial
Average .DJI fell 44.77 points, or 0.15%, to 30,154.54.
"It likely reflects continued confidence on the part of
investors who believe low rates for an extended period provides
support to stock prices even at these elevated levels," said
Rick Meckler, partner at Cherry Lane Investments in New Jersey.
The dollar also recovered some losses, having earlier fallen
to its lowest level since April 2018. The dollar index .DXY ,
which tracks the greenback versus a basket of six currencies,
fell 0.213 point, or 0.24 percent, to 90.26.
Weaker-than-expected retail sales data in the United States,
however, added to growing signs of a slowdown in that economy's
recovery from the pandemic recession, shining light on the need
for a deal on coronavirus relief. U.S. congressional negotiators were "closing in on" a $900
billion COVID-19 aid bill that will include a new round of
stimulus checks and extended unemployment benefits, lawmakers
and congressional aides said. "Everyone knows that something needs to be done before the
holiday," said Edward Moya, senior market analyst at OANDA in
New York. "The weaker retail sales report gave a strong
indication that sentiment among U.S. consumers is waning."
The MSCI world stock index .MIWD00000PUS hit a record
high, up 0.6% on the day. The index has climbed 15% since the
beginning of November, propelled by trillions of dollars worth
of global stimulus.
In Europe, markets were cheered by the possibility of a
Brexit trade deal, better-than-expected euro zone PMI economic
data and a European Central Bank decision to let euro zone banks
start paying dividends again if they have enough capital.
European stocks .STOXX rose 0.8% with the UK's FTSE 100
index .FTSE jumping 0.9%.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS rose 6.88 points, or 1.07%, to 647.19.
SHOT IN THE ARM
Progress on rolling out vaccines continued, after Moderna
Inc's MRNA.O COVID-19 vaccine appeared set for regulatory
authorization this week.
The United States also expanded its rollout of the newly
approved vaccine developed by Pfizer Inc PFE.N and BioNTech SE
BNTX.O .
Positive soundings from the European Union on Brexit talks
helped lift the British pound GBP= on Wednesday above $1.35
and to its highest level against the dollar since May 2018.
Britain and the European Union have moved closer to sealing
a new trade deal, but it was still unclear if they would
succeed, the bloc's chief executive said. The euro rose above $1.22 EUR= for the first time since
April 2018, and German government bond yields DE10YT=RR , which
tend to rise on positive news on the economic outlook, hit a
one-week high after data showed better-than-expected business
activity in the bloc this month. GVD/EUR
A long-overdue U.S. Treasury report on the foreign exchange
practices of U.S. trading partners labeled several countries,
including Switzerland and Vietnam as currency manipulators and
added others to a watchlist. The news helped Bitcoin smash through $20,000 for the first
time.
Spot gold prices XAU= rose $9.731, or 0.53%, to $1,863.19
an ounce. U.S. gold futures GCv1 settled up 0.2% at $1,859.10.
Brent crude LCOc1 settled up $0.32, or 0.63%, at $51.08 a
barrel. U.S. crude CLc1 settled up $0.20, or 0.42%, at $47.82
per barrel.