GLOBAL MARKETS-Markets mixed with all eyes on stimulus talks

(New throughout, adds U.S. indexes opening prices)
* Dow Jones Industrial Average, S&P 500 down 0.1%
* European stocks down 0.9%
* Gold hits one-week high, dollar at six-week low
* U.S. Treasury yields climb to four-month high
* Graphic: 2020 asset performance http://tmsnrt.rs/2yaDPgn
* Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh

By Matt Scuffham
NEW YORK, Oct 21 (Reuters) - Global stocks sought direction
on Wednesday, while gold hit a one-week high and the dollar fell
to a six-week low as investors waited to see whether an
agreement could be reached on a fresh U.S. coronavirus relief
package.
The White House and Democrats in the U.S. Congress moved
closer to agreement on measures on Tuesday as President Donald
Trump said he was willing to accept a large aid bill.
Signs of opposition from Trump's Republican Party may have
added to some caution in markets, however, slowing the move
higher in U.S. borrowing costs.
Senate Majority Leader Mitch McConnell provided no timetable
for considering a relief bill and privately told his fellow
Republicans he did not favor a deal before the Nov. 3
presidential and congressional elections, a senior Senate
Republican aide told Reuters. Some investors doubted whether a deal could be reached.
"I think that Mitch McConnell holds the cards here," said Ed
Moya, senior market analyst at OANDA. "I would be surprised if a
deal was reached."
The Dow Jones Industrial Average .DJI fell 38.13 points,
or 0.13%, at the open to 28,270.66.
The S&P 500 .SPX opened lower by 3.21 points, or 0.09%, at
3,439.91, while the Nasdaq Composite .IXIC gained 13.90
points, or 0.12%, to 11,530.39 at the opening bell.
The MSCI world equity index .MIWD00000PUS , which follows
shares in nearly 50 countries, was flat, its earlier
Asia-powered gains eroded when European shares turned negative
in early trading and fell further through the morning.
The Euro STOXX 600 .STOXX fell 0.9%, led lower by
healthcare .SXDP and real estate .SX86P shares. Indexes in
Paris .FCHI and Frankfurt .GDAXI fell 1% and 0.9%
respectively. Gains for sterling put pressure on London shares
.FTSE .
Earlier, Asia-Pacific shares outside Japan .MIAPJ0000PUS
gained 0.4%.
Gold, considered a hedge against inflation, currency
debasement and uncertainty, has gained more than 26% this year,
driven mainly by unprecedented levels of global stimulus to
cushion economies from the coronavirus-induced slump.
Spot gold XAU= was up 0.6% at $1,917.57 per ounce by 8:12
a.m. ET (1212 GMT), after touching its highest since Oct. 13.
U.S. gold futures GCv1 rose 0.3% to $1,920.90 per ounce.
Bets on U.S. coronavirus relief also played out in
government bonds markets.
U.S. Treasury yields held near their highest levels in four
months on Wednesday on expectations a deal can be reached.
The benchmark 10-year U.S. Treasury yield was around 1.5
basis points higher on the day at 0.82% US10YT=RR , having
touched fresh four-month highs at 0.84%.
The dollar fell against a basket of currencies =USD as
hopes for the pre-election stimulus package led traders to buy
riskier currencies. It was last down 0.3% at 92.764.
The Chinese yuan reached a more-than-two-year high on firmer
central bank guidance and recent data showing a sustained
recovery in the world's second-largest economy.
The yuan CNY= was up 0.3% at 6.6552, taking gains against
the dollar this year to around 4.5%. Its rise helped lift the
Australian dollar AUD= , weighed down by expectations of a rate
cut in November, from Tuesday's three-week low.
Elsewhere, sterling rose to a one-week high against the U.S.
dollar on Wednesday after the European Union's Brexit
negotiator, Michel Barnier, said a new trade deal with Britain
was "within reach". The pound GBP=D3 rose 0.8% to $1.3050, its highest since
Oct. 14. The British currency also rose against the euro by 0.6%
to 90.80 pence EURGBP=D3 on the comments.
Oil prices eased after a surprise buildup in U.S. crude
stockpiles stoked concerns about a global supply glut and a
spike in global COVID-19 cases fueled fears of a stalled oil
demand recovery.
Brent crude futures LCOc1 for December delivery were at
$42.44 a barrel, down 72 cents, or 1.67%, as of 8:09 a.m. ET
(1209 GMT), while December U.S. West Texas Intermediate (WTI)
crude CLc1 futures slipped 73 cents, or 1.75%, to $40.97. Both
benchmarks rose in the previous session.

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