(Changes dateline to New York; adds Wall Street open; updates
* Global shares mostly recover after China downgrade
* Dollar flat as investors await Fed minutes
* European shares fall, oil prices dip
By Hilary Russ
NEW YORK, May 24 World stock markets recovered
on Wednesday from initial losses after Moody's first credit
downgrade of China in 30 years, with investors turning their
attention to U.S. Federal Reserve minutes that could provide
more certainty of a rate hike next month.
Asia stocks and emerging markets initially skidded after
Moody's Investors Service's downgraded China, cutting its
sovereign debt to A1 from Aa3.
But dented markets mostly recovered. Japan's Nikkei
rose 0.66 percent and emerging market stocks rose 0.05 percent.
MSCI's broadest index of Asia-Pacific shares outside Japan
closed 0.05 percent lower.
Markets were lacking fresh economic or corporate drivers.
Investors shrugged off the rise in Britain's terror threat level
to maximum in the wake of Monday's attack in Manchester.
The Dow Jones Industrial Average rose 20.59 points,
or 0.1 percent, to 20,958.5, the S&P 500 gained 1.15
points, or 0.05 percent, to 2,399.57 and the Nasdaq Composite
added 7.18 points, or 0.12 percent, to 6,145.89.
The U.S. dollar hovered just above its 6-/12 month lows as
investors shifted from U.S. politics to monetary policy ahead of
the release of the minutes from the Fed's May meeting, scheduled
to be released at 1800 GMT on Wednesday.
Measured against a basket of other major currencies, the
dollar index rose 0.03 percent.
"The dollar has taken quite a beating over the last month,"
said Minh Trang, senior currency trader at Silicon Valley Bank
in Santa Clara, California.
"You are seeing a little bit of calming down this morning as
there is very little economic or headline news to really sway
the market one way or other."
Interest rate futures implied traders see about an
80-percent chance of a quarter-point rate hike at the Fed's June
"Our U.S. economists expect the minutes to come down on the
hawkish side and continue to expect the Fed to hike in June and
September and announce balance sheet reduction in December,"
Citi analysts wrote on Wednesday.
While recent economic data has been mixed, with signs of a
dip in consumer sentiment and spending, the job market continues
to strengthen. That could give the Fed impetus to continue with
its path of monetary tightening.
Oil prices well, with U.S. crude down 0.29 percent
to $51.32 per barrel and Brent last at $54.00, 0.28
percent lower on the day.
The pan-European FTSEurofirst 300 index lost 0.06
percent and MSCI's gauge of stocks across the globe
shed 0.08 percent.
The euro was 0.03 percent lower at $1.1179.
Spot gold added 0.2 percent to $1,252.75 an ounce.
(Additional reporting by Jamie McGeever in London, Saqib Iqbal
Ahmed in New York; Editing by Nick Zieminski)