* Global stocks off 9-month highs
* Profit taking and Bernanke comments weigh
* Dollar steady
By Jeremy Gaunt, European Investment Correspondent
LONDON, July 22 (Reuters) - World stocks clung close to
nine-month highs on Wednesday with some profit taking in Europe
keeping a lid on further gains and cautious words from U.S.
Federal Reserve Chairman Ben Bernanke dampening sentiment.
The dollar was steady against major currencies.
MSCI's all-country world stock index <.MIWD00000PUS> was
down 0.2 percent, just off a 2009 high reached on Tuesday that
took the index to levels last seen in October 2008.
The FTSEurofirst 300 <> index of top European shares
was down 0.5 percent, breaking a seven-day winning streak.
Earlier, Japan's Nikkei <> rose 0.7 percent to hit its
highest in more than two weeks.
"Experience tells us that the market doesn't go up for more
than seven or eight days in a row and people were getting the
feeling that the market (was overbought)," said Jim Wood-Smith,
strategist at Williams de Broe.
Equities have been rallying sharply over the past week as
corporate earnings reports, including many U.S. majors, have
provided positive surprises.
On Tuesday, for example, Caterpillar Inc <CAT.N>, Apple Inc
<AAPL.O> and Merck & Co <MRK.N>, all issued encouraging profit
reports. But some firms, including Caterpillar, have been
cautious about the current quarter. []
Bernanke also sounded a note of caution on Tuesday, saying
U.S. unemployment was likely to remain high into 2011 which
could undermine consumer confidence and derail a recovery.
[]
DOLLAR STEADY
The dollar held steady against most major currencies,
recouping losses following Bernanke's comments, which implied
U.S. interest rates would stay low for some time.
"Bernanke was trying to improve policy credibility in the
market and anchor inflation expectations," said Lee Hardman,
currency economist at Bank of Tokyo-Mitsubishi UFJ.
"The dollar has been broadly stable and that is a sign that
Bernanke's message has come across well," he said.
The dollar index <.DXY>, a gauge of its performance against
six major currencies, was up 0.1 percent at 79.045 after
touching 78.591 on Tuesday, its lowest since June 3.
The euro was down 0.2 percent at $1.4183 after hitting a
seven-week high on Tuesday at $1.4278 <EUR=>, close to its peak
for the year.
Euro zone government bond yields were flat to lower.
Crude oil was down 76 cents at $64.84 a barrel. An
unexpected rise in U.S. crude stocks suggested demand in the
world's top energy consumer was still weak.
(To read Reuters Global Investing Blog click on
http://blogs.reuters.com/globalinvesting; for the MacroScope
Blog click on http://blogs.reuters.com/macroscope; for Hedge Hub
click on http://blogs.reuters.com/hedgehub)
(Editing by Mike Peacock)
