* Graphic: Global asset performance http://tmsnrt.rs/2yaDPgn
* Graphic: World FX rates http://tmsnrt.rs/2egbfVh
By Herbert Lash
NEW YORK, March 16 (Reuters) - Wall Street's S&P 500 index
ended lower on Tuesday and a gauge of global equities was close
to flat as investors awaited the Federal Reserve and other
central bank meetings this week, where regulators will indicate
whether they will retain policies supporting a post-pandemic
recovery.
U.S. stocks retreated late in the session, with the Nasdaq
shedding more than a 1% gain, as yields on longer-maturity U.S.
Treasury bonds ticked up, nipping investor enthusiasm for tech
stocks that are high-growth but wary of rising inflation.
The U.S. dollar edged up against the euro and commodity
currencies such as the Australian and New Zealand dollars as the
two-day Fed meeting kept trading from being volatile.
But oil prices fell for a third day after Germany, France
and other European countries suspended use of AstraZeneca (NASDAQ:AZN)'s
AZN.L COVID-19 vaccine, threatening economic growth and fuel
demand, and tarnishing vaccine rollouts as a pillar for a global
recovery.
Speculation about what the Fed will say on Wednesday at the
end of its two-day meeting kept markets mostly range-bound.
"The hope out there, for at least some investors, is they do
an Operation Twist - buying long-term bonds and selling short
bonds to help the economy," said Tim Ghriskey, chief investment
strategist at Inverness Counsel in New York.
The Nasdaq rose to a two-week high on a rebound in tech
stocks at the heart of February's sell-off. MSCI's benchmark for
global equity markets, which is heavily weighted to the big U.S.
technology firms, .MIWD00000PUS advanced 0.14% to 677.96.
After the coronavirus pandemic, demand will increase further
for technology stocks, according to Johan Grahn, head of ETF
strategy at AllianzIM in Minneapolis.
"As long as technology is solving real problems for people,
there will continue to be a market for these types of
companies," Grahn said. "There will be more demand for
technology solutions across the board."
European stocks rose after an upbeat forecast from German
carmaker Volkswagen prompted a rally in the automobiles sector.
The broad FTSEurofirst 300 index .FTEU3 rose 0.8%, closing in
on its record peak of February 2020, while the regional autos
sector .SXAP jumped 2.1% to its highest level since June 2018.
On Wall Street, the Dow Jones Industrial Average .DJI fell
0.39%, the S&P 500 .SPX lost 0.16% and the Nasdaq Composite
.IXIC added 0.09%.
Euro zone government bonds held ground as caution set in
before the Fed meeting.
Longer-term U.S. Treasury yields initially slipped as the
market looked ahead. The 10-year U.S. Treasury US10YT=RR note rose 0.4 basis
points to yield 1.6232%. Yields on the benchmark last week hit
1.642% on expectations of rising inflation.
The Fed is targeting maximum employment and higher inflation
expectations, and will do whatever it can to get higher
inflation, said Steven Ricchiuto, U.S. chief economist at Mizuho
Securities USA LLC in New York.
"This is what is motivating the sell-off in the 10-year
note, and there are a lot of people who are just basically
coming around to recognizing that," Ricchiuto said.
Fed policymakers are expected to forecast the U.S. economy
will grow in 2021 by the fastest rate in decades as it recovers
from a coronavirus-stricken 2020. The Bank of England also meets this week, on Thursday, and
the Bank of Japan wraps up a two-day meeting on Friday.
The outlook for post-pandemic recoveries continued to
diverge between the United States and Europe.
U.S. President Joe Biden's order to make vaccinations
available to all adults by May 1 contrasted with stuttering
rollouts in Germany, France and elsewhere, where use of the
AstraZeneca vaccine has been suspended amid concern over
possible serious side effects.
In currencies, the dollar held small gains from overnight,
with caution evident ahead of the central bank meetings.
The dollar index =USD rose 0.059%, with the euro EUR=
down 0.22% to $1.1902.
The Japanese yen JPY= strengthened 0.09% versus the
greenback at 109.01 per dollar.
Gold edged lower, pressured by a stronger dollar. U.S. gold
futures GCv1 settled up 0.1% at $1,730.90.
Europe's medicines watchdog said the benefits of the
AstraZeneca vaccine outweigh its risks, but investors worry the
slow pace of vaccinations in the European Union could dampen
both the recovery and fuel demand. Brent crude futures LCOc1 settled down 49 cents at $68.39
a barrel and U.S. crude futures CLc1 fell 59 cents to settle
at $64.80 a barrel.
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Emerging markets http://tmsnrt.rs/2ihRugV
Global asset performance http://tmsnrt.rs/2yaDPgn
Federal Open Market Committee Projections https://tmsnrt.rs/3eJVKCI
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