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GLOBAL MARKET-US stocks bounce, dollar softens as Fed says recovery on track

Credit: REUTERS/ANDREW KELLY

U.S. stocks edged higher on Wednesday and the dollar slipped into losses after the Federal Reserve said the economic recovery was on track, but offered no clues about when monetary policy will eventually be tightened.

New throughout, updates prices, market activity and comments after Fed's policy meeting

S&P 500 up 0.05%, Nasdaq rebounds 0.6%

European stocks boosted by upbeat earnings

China blue-chip index closes up 0.2%

Yuan edges back from three-month lows

Dollar makes marginal gains

Fed statement due at 2 p.m. EDT

By Koh Gui Qing and Tom Arnold

NEW YORK/LONDON, July 28 (Reuters) - U.S. stocks edged higher on Wednesday and the dollar slipped into losses after the Federal Reserve said the economic recovery was on track, but offered no clues about when monetary policy will eventually be tightened.

The Fed said after its latest policy meeting that the economy has kept strengthening despite a rise in coronavirus infections, and that accelerating inflation remained the result of "transitory factors".

In a news conference after the meeting, Fed Chairman Jerome Powell said it is not yet time to think about raising interest rates. He said the central bank was thinking about tapering asset purchases but has not set a timetable for when to do so.

"It was a relief that there was no talk of tapering quite yet," said Ryan Detrick, a senior market strategist at LPL Financial in North Carolina. "Our view is the Fed will likely announce when tapering will start at Jackson Hole later in August."

The Dow Jones Industrial Average .DJI fell 0.15%, the S&P 500 .SPX edged up 0.17%, and the tech-focused Nasdaq Composite .IXIC rebounded 0.75% after hitting its lowest in more than two months on Tuesday.

Any sign the Fed may tighten policy soon could unnerve markets, since its loose policy has flushed the market with cash and pushed Wall Street to record highs. Also, some investors worry the fast-spreading Delta coronavirus variant may scupper economic growth, and hope the Fed will stand pat for now.

The dollar slipped into losses after the meeting. The U.S. currency had a month-long rally as investors bet a strengthening economy would spark a Fed move to taper to quell inflation pressures.

The dollar index =USD fell 0.18%, and a weaker dollar boosted the euro EUR= up 0.22% to $1.184.

Treasury yields climbed after the Fed announcement. The yield on 10-year Treasury notes US10YT=RR was up 2.9 basis points to 1.263%, and the yield on 10-year Treasury Inflation-Protected Securities US10YTIP=RR climbed as high as -0.917%, before pulling back to -1.112%.

Investor risk appetite also got a boost from signs that China's stock market might finally be steadying, after being hammered this week by concerns of a widening regulatory crackdown. .SS

Following two sessions of falls, the pan-European STOXX 600 index .STOXX rose 0.66% and MSCI's gauge of stocks across the globe .MIWD00000PUS gained 0.38%.

Chinese blue chips .CSI30 closed up 0.2% overnight, and Hong Kong's benchmark .HSI jumped 1.5%, but remained near nine-month lows.

The Chinese yuan CNY= also edged back from three-month lows. On Tuesday, it had its biggest daily decline since October. The offshore Chinese yuan CNH= strengthened versus the greenback at 6.4894 per dollar.

Oil prices rose after data showed U.S. crude inventories fell more sharply than analysts had forecast. O/R

U.S. crude CLc1 recently rose 1% to $72.39 per barrel and Brent LCOc1 was at $74.74, up 0.35% on the day.

Gold held steady near $1,800. GOL/

Spot gold XAU= added 0.2% to $1,802.81 an ounce. U.S. gold futures GCc1 gained 0.06% to $1,800.80 an ounce.

Cryptocurrency Bitcoin BTC=BTSP bounced back above $40,000, jumping 2.4% to $40,428.38.

World FX rates YTDhttp://tmsnrt.rs/2egbfVh

Global asset performancehttp://tmsnrt.rs/2yaDPgn

Asian stock marketshttps://tmsnrt.rs/2zpUAr4

Chinese stocks in U.S. take a beatinghttps://tmsnrt.rs/375Yu8q

(Reporting by Koh Gui Qing in New York, Tom Arnold in London and Alun John in Hong Kong; Additional reporting by Sujata Rao; Editing by Ana Nicolaci da Costa, Kim Coghill, Catherine Evans, Timothy Heritage, Barbara Lewis and David Gregorio)

((alun.john@thomsonreuters.com;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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