World stocks mixed ahead of Fed meeting

HONG KONG: World stock markets were mixed Tuesday as investors took profits before year's end and awaited the Federal Reserve's latest assessment of the U.S. economy.

A mostly down day in Asia and a mixed performance early in Europe followed modest gains on Wall Street, where investors sent major indexes to new highs for 2009 after Dubai's $10 billion bailout. Oil prices wallowed below $70 a barrel, while the dollar strengthened against the yen.

After a big run since March, the markets have drifted this month. Many investors are unwilling to increase their bets toward the end of the year, with lingering uncertainty surrounding debt problems in Dubai and other governments only adding to their caution.

This week, investors will be watching closely what the U.S. central bank has to say about the world's largest economy after its policy meeting Wednesday. It's widely expected to keep interest rates at historic lows.

"The Fed's statement will definitely influence the markets," said Peter Lai, investment manager at DBS Vickers in Hong KOng. "The big questions are when the Fed thinks the unemployment rate will start to go down and when it will have to start raising interest rates."

As trading got started in Europe, France's CAC-40 and Germany's DAX were both up 0.2 percent while Britain's FTSE 100 was off 0.3 percent. Futures pointed to modest gains Tuesday in the U.S. with Dow futures up 4 points at 10,502. S&P futures gained 5.4, or 0.5 percent, to 1,113.40.

In Asia, Japan's Nikkei 225 stock average fell 22.20 points, or 0.2 percent, to 10,083.48 and Hong Kong's Hang Seng retreated 271.83, or 1.2 percent, to 21,813.92.

China's main index fell 0.9 percent amid news the government was vowing to clamp down on surging property prices. South Korea's Kospi was marginally in the green — rising 0.1 percent to 1,665.85 — after flitting in and out of negative territory.

Elswhere, Australia's benchmark added 0.4 percent and India's Sensex lost 0.8 percent.

Tuesday in the U.S., the Dow rose 29.55, or 0.3 percent, to 10,501.05, its highest close since Oct. 1, 2008.

The S&P 500 index rose 7.70, or 0.7 percent, to 1,114.11, its highest finish since Oct. 2, 2008. The Nasdaq composite index rose 21.79, or 1 percent, to 2,212.10.

Oil prices fell in Asia, with benchmark crude for January delivery down 2 cents to $69.49 a barrel. The contract rose 36 cents overnight to settle at $69.51.

The dollar rose to 89.03 yen from 88.55 yen. The euro fell to $1.4561 from $1.4656.