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GLOBAL STOCKS jump; dollar dips on stimulus hopes – Reuters

August 29, 2011

Global stocks jump; dollar dips on stimulus hopes

By Patrick Graham

LONDON | Mon Aug 29, 2011 4:13am EDT

(Reuters) – Global stocks jumped almost one percent on Monday while the dollar struggled after Federal Reserve Chairman Ben Bernanke left the door open for further action to stimulate the U.S. economy and fight unemployment.

World shares .MIWD00000PUS rose 0.9 percent, with Asian markets tracking a strong bounce for Wall Street, which closed up 1 percent following Bernanke’s keynote speech in Jackson Hole on Friday.

IMF chief Christine Lagarde also added to market pressure for policymakers to do more to prop up a flagging global economy at the meeting of central bankers, telling officials they must “act now” to save the recovery.

European stocks .FTEU3 also gained, up 0.7 percent, and U.S. stock futures rose around 1 percent after Hurricane Irene, downgraded to tropical storm status, spared the nation’s financial center the worst.

London markets are closed on Monday for a holiday.

Bernanke gave no details of further action to boost the U.S. recovery but said the central bank’s policy panel would meet for two days next month instead of one to discuss additional monetary stimulus, offering some hope to investors of a move then.

Analysts said a bad run of data before the Fed’s meeting may prove crucial.

“The change to a two-day meeting to ‘allow a fuller discussion’ is something that will likely keep market expectations elevated about the possibility of further monetary policy stimulus,” Barclays Capital economist Michael Gapen said in a note to clients.

“Mr Bernanke said the Fed is in a data-dependent mode and there will be many discussions at the two-day FOMC in September.”

via Global stocks jump; dollar dips on stimulus hopes | Reuters.

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