Dollar gains, shares firm as markets await Fed
By Leah Schnurr
NEW YORK (Reuters) - The dollar rose and U.S. and European equity markets pushed higher on Tuesday as investors fixed their attention on the future of U.S. monetary policy ahead of the Federal Reserve's policy meeting.
The U.S. central bank kicks off a two-day gathering on Tuesday, with global markets across asset classes on high alert for any guidance on when and how quickly it may wind down its bond buying program. The central bank issues its policy statement on Wednesday, which will be followed by a news conference by Chairman Ben Bernanke.
Wall Street opened little changed before extending gains about an hour into trading, while European shares edged higher.
The Fed meeting has taken on greater significance since Bernanke said in May stimulus plans could be scaled back if the U.S. economy gains momentum, comments which have thrown a wrench in this year's equity market rally.
The Fed's policy won't show major changes after the meeting, according to Todd Salamone, director of research at Schaeffer's Investment Research in Cincinnati.
"They won't do anything in this meeting and I think the data supports that," Salamone said. "We remain in a holding pattern until the policy statement is released."
The Dow Jones industrial average .DJI gained 102.97 points, or 0.68 percent, to 15,282.82. The Standard & Poor's 500 Index .SPX rose 8.59 points, or 0.52 percent, to 1,647.63. The Nasdaq Composite Index .IXIC climbed 20.35 points, or 0.59 percent, to 3,472.48.
European shares .FTEU3 were up 0.1 percent. Stocks found some support in a rise in investor sentiment in Germany that suggested Europe's largest economy is on the slow road to recovery. But it was only a brief distraction ahead of the Fed. Continued...