Global stocks up, investors hope for comforting Fed message

By Yasmeen Abutaleb

NEW YORK (Reuters) - Global equity markets rose on Wednesday ahead of a policy statement in which the Federal Reserve is widely expected to announce the end of its stimulus program but say it will wait to raise interest rates due to concerns about economic growth.

The Fed is likely to say it will no longer add to its holdings of Treasury bonds and mortgage-backed securities, effectively ending a program that at its peak pumped $85 billion a month into the financial system to hold interest rates down and boost the flagging economy.

Currency and fixed income markets were also subdued ahead of the Fed statement, as the dollar and major government bond yields were little changed.

"Any major tightening of monetary policy remains a story for the latter half of 2015," said Nick Gartside, chief investment officer for fixed income at JP Morgan Asset Management in London.

"The Fed will remain keen to defuse any large-scale market turmoil in the immediate term and will continue to focus on language that helps to stabilize the markets," he said.

MSCI's index of equity performance in 45 countries rose 0.4 percent as did the pan-European FTSEurofirst 300 index of leading companies.

Germany's biggest lender, Deutsche Bank,announced a third-quarter net loss on heavy legal costs. Shares fell 1.74 percent.

Better-than-expected U.S. corporate earnings have also helped ease global growth concerns. With 245 companies in the S&P 500 having reported earnings so far for the third quarter, 73.5 percent have beat analyst expectations, according to Thomson Reuters. Over the past four quarters, 67 percent of companies have beat estimates.

In Europe about a third of companies listed on the STOXX Europe 600 benchmark have reported results so far, with 66 percent beating profit forecasts, Thomson Reuters data show.

The Dow Jones industrial average rose 42.35 points, or 0.25 percent, to 17,048.1, the S&P 500 gained 3.96 points, or 0.2 percent, to 1,989.01 and the Nasdaq Composite dropped 4.07 points, or 0.09 percent, to 4,560.23.

The dollar fell against the euro to $1.2747, down 0.1 percent, and fell against a basket of major currencies 0.12 percent.

The 10-year Treasury notes fell 7/32 in price to yield 2.3085 percent.

The German Bund yield fell to 0.883 percent after Germany sold 10-year bonds at auction on Wednesday but bids failed to match the amount on offer, making it the ninth technically "failed" bond auction this year.

Oil traded higher as Brent crude rose 1.2 percent to $87.07 a barrel and U.S. crude rose 0.9 percent to $82.19.

(Additional reporting by Jamie McGeever in London; Editing by James Dalgleish; To read Reuters Global Investing Blog click on http://blogs.reuters.com/globalinvesting; for the MacroScope Blog click on http://blogs.reuters.com/macroscope; for Hedge Fund Blog Hub click on http://blogs.reuters.com/hedgehub)