Global share prices and the euro held steady on Wednesday as investors waited to see if central banks in the United States and Europe would take fresh actions to ease the euro-zone debt crisis and rejuvenate the global economy.
The Federal Reserve, which concludes its two-day policy meeting later in the day, is likely to show it is ready to act to support a weakening U.S. economy but stop short of aggressive measures for now.
The Fed statement comes a day before a key meeting of the European Central Bank, after its president, Mario Draghi, heightened speculation of further ECB purchases of Italian and Spanish bonds by saying that he would do "whatever it takes to preserve the euro."
But the risk of disappointment is high. Spanish bond yields could jump again and stocks and the euro could sell off if the ECB does not deliver. Uncertainty ahead of the ECB meeting drove investors to safe-haven German bonds, allowing Berlin to sell five-year debt at a record low cost.
"Everybody is waiting on central bank policy. Right now the equity markets are being held together by easy money, and if we don't get more of it soon we are likely to be disappointed," said Jack Ablin, chief investment officer, Harris Private Bank in Chicago.
"We are going to need a monetary booster shot both from Europe and the U.S. to keep this party going."
The MSCI world equity index rose 0.1 percent to 316.44. European shares gained 0.2 percent to 1065.03.
The Dow Jones industrial average was up 16.69 points, or 0.13 percent, at 13,025.37. The Standard & Poor's 500 Index was up 1.33 points, or 0.10 percent, at 1,380.65. The Nasdaq Composite Index was down 0.81 points, or 0.03 percent, at 2,938.71.
The S&P 500 posted its biggest two-day percentage gain of the year to close out last week on increased expectations both the Fed and the ECB will plan further actions to stimulate their respective economies this week, but the index has stalled the last two sessions as it reached levels not seen since early May.
The U.S. private-sector added 163,000 new jobs in July, slightly down from the previous month, but the gain still topped economists' expectations of 120,000 new jobs. Investors use the report to glean clues on the health of the labor market ahead of Friday's non-farm payrolls report.
The euro rose 0.1 percent to $1.2314.
"On the ECB, the uncertainty is very high," said Jens Nordvig, global head of FX strategy at Nomura Securities in New York. "Some additional commitment to support sovereign bond markets is highly likely, but how firm and how conditional this commitment will be is far from clear."
Bundesbank President Jens Weidmann said in an interview published on the bank's website that governments overestimated the ECB's capacities and placed too many demands on it.
The better tone in the markets on Wednesday came despite data showing Europe and Asia's economic performance worsening.
Germany's manufacturing sector contracted in July at its fastest pace in more than three years, according to the latest Markit Purchasing Managers' Index (PMI) report. The broader euro zone manufacturing sector contracted for the 11th straight month in July, the data showed.
The PMI data also showed output flagged more than expected in Britain's manufacturing sector during July, dealing a severe blow to hopes that the country will emerge from recession soon.
In the United States, the manufacturing sector shrank for the second month in a row in July as new orders improved modestly but employment dropped to a 2-1/2-year low.
Earlier, China's official factory purchasing managers' index fell to an eight-month low of 50.1 in July, suggesting virtually no growth in the world's second-biggest economy.
"It is consistent with a very sharp slowing in the global economy," said Jens Larsen, chief European economist for RBC Capital Markets.
The benchmark 10-year U.S. Treasury note was down 12/32 in price, with the yield at 1.5103 percent.
