MARKETS / FINANCE

A senior Federal Reserve official said on Wednesday the U.S. central bank may start tightening financial conditions by adjusting its extensive asset purchase programs rather than raising interest rates.

Italy's Ferrero and U.S.-based Hershey are reviewing options over a possible bid for Cadbury , but hostile bidder Kraft's $16.8-billion offer is still seen as the front runner.

Foreign demand for long-term U.S. financial assets grew to $31.7B in September.

The S&P 500 briefly pared losses and turned positive after the open on Wednesday, led by gains in financials and materials stocks.

U.S. stocks were set to open lower on Wednesday after data showed U.S. housing starts fell unexpectedly in October, offsetting strength in the natural resources sectors amid U.S. dollar weakness.

Chile's peso CLP= rose 1 percent to a 17-month high in early trade on Wednesday on global dollar weakness, increasing the likelihood of threatened central bank intervention to tame the appreciation.

Investors shifted out of bonds into equities and commodities in November as confidence in the global economic recovery underpinned their risk appetite, a survey showed on Wednesday.

U.S. consumer prices rose more than expected in October, chiefly from increases in energy and motor vehicle costs, according to government data on Wednesday that showed the economy may have to confront some inflation threats during its recovery from the worst recession in 70 years.

New U.S. housing starts in October unexpectedly fell to their lowest level in six months, weighed down by a sharp decline in construction activity for both single-family and multi-family dwellings, a government report showed on Wednesday.

President Barack Obama gave his sternest warning yet about the need to contain rising U.S. deficits, saying on Wednesday that if government debt were to pile up too much, it could lead to a double-dip recession.

Future supply shortages could drive up contracts for oil use in several years' time, as they mimic a market for near-term delivery that has more than doubled since the start of the year.

Mitsubishi UFJ Financial Group posted a 59 percent rise in quarterly profit helped by stronger lending, becoming the third major Japanese bank to post market-beating results, in a sign that Tokyo's lenders may now be on the mend.

European stocks were up 0.5 percent around midday on Wednesday, rising for the ninth time in 11 sessions, led by banks while buoyant commodity prices boosted shares of oil producers and miners such as Rio Tinto (RIO.L).

U.S. stock index futures edged higher on Wednesday as weakness in the U.S. dollar underpinned natural resource shares, including gold miners, ahead of key data on October housing starts and consumer prices.

Gold hit a fresh record high near $1,150 an ounce on Wednesday, boosting precious metals across the board, as a dip in the dollar index added to momentum buying as prices broke through key technical resistance levels.

* U.S. stock index futures pointed to a mixed opening on Wall Street on Wednesday as investors await U.S. inflation and housing start figures.

Gold prices hit a record high and oil and stock prices around the world rose on Wednesday, while the dollar eased off ahead of U.S. inflation data and minutes from the Bank of England's November meeting.

The dollar weakened broadly on Wednesday as dealers took profit on the currency's biggest rise in three weeks the previous session and pushed the euro back to the middle of its range of the last fortnight.

The dollar eased back on Wednesday from its biggest rise in three weeks the previous session, as traders awaited U.S. inflation data and minutes from the Bank of England's November meeting for further direction.

U.S. stock index futures pointed to a mixed opening on Wall Street on Wednesday as investors await U.S. inflation and housing start figures.

Goldman Sachs Group Inc, facing criticism over its outsized profits and bonuses, will contribute $500 million to programs that help small businesses, the company said on Tuesday.

John Thain, former Merrill Lynch & Co Inc chief executive, wants the world to know that he has never thrown a chair.

Vancouver will modify powerful audio equipment that critics say could be used as a sonic gun against protesters at next year's Winter Olympics, and stop any chance of using the device as a weapon, Vancouver police said on Tuesday.

Gold prices hit a record high and oil and stock prices around the world rose on Wednesday, while the dollar eased off ahead of U.S. inflation data and minutes from the Bank of England's November meeting.

A key U.S. congressional panel moved toward toughening a plan for dealing with too big to fail financial firms on Tuesday, while rejecting a Republican alternative that is expected to reappear later.

Top Federal Reserve officials on Tuesday struck differing notes on the likely pace of the U.S. economic recovery and one warned that pockets of weakness must not deter the central bank from withdrawing its extraordinary economic support.

U.S. stocks rose to fresh 13-month highs on Tuesday as upbeat broker views on improving prospects for two Dow components offset disappointing holiday spending outlooks from Target and Home Depot.

Citigroup Inc said on Tuesday it boosted the base salaries for its chief financial officer and a global markets co-head, but still plans to pay Chief Executive Vikram Pandit $1 for the year.

U.S. industrial output barely rose last month and wholesale inflation was tame, suggesting the economy's recovery from a severe recession was losing some steam as government stimulus faded.