GLOBAL MARKETS-Oil slumps, stocks soar as Mideast conflict worries fade

* Trump says Tehran 'standing down' after missile attack

* Global equity index, stocks on Wall Street rebound

* Oil, gold prices tumble after spiking on Iran strike

By Herbert Lash

NEW YORK, Jan 8 (Reuters) - Oil prices tumbled and equity

markets soared on Wednesday after U.S. President Donald Trump

said an Iranian missile strike on bases in Iraq had not harmed

U.S. troops and damage was minimal, showing Tehran wanted to

de-escalate the Middle East standoff.

Iran fired missiles at military bases housing American

troops in Iraq in retaliation for last week's slaying by U.S.

drones of Iranian commander Qassem Soleimani, a strike that

raised fears of an escalating regional conflict. "Iran appears to be standing down, which is a good thing for

all parties concerned and a very good thing for the world,"

Trump said in an address to the nation.

The S&P 500 and Nasdaq stock indexes hit record highs after

Trump's remarks and crude oil prices slumped, with U.S.

benchmark West Texas Intermediate posting a 10% slide from a

peak following the Iranian attack to after Trump spoke.

Gold had surged past $1,600 for the first time in nearly

seven years in earlier trade before discarding gains as fears of

a larger conflict abated, leading investors to move out of

safe-haven assets as risk appetite returned. The safe-haven yen fell from three-month highs against the

dollar and the Swiss franc, another safe haven, also retreated.

Brent oil futures slid off a four-month peak hit in

frenzied early trade soon after the Iranian attack. "Once Trump spoke and suggested that this is basically done

for now, risk took off. We're back to the all-time highs in the

S&P and accordingly, so-called safe assets sold off," said Jacob

Oubina, senior U.S. economist at RBC Capital Markets.

Iran's long-term goal of a sphere of influence might be

jeopardized if it attacks too aggressively, said John Vail,

chief global strategist at Nikko Asset Management in Tokyo.

"The impact on global risk assets will probably moderate

from here as we are likely past the worst part of the crisis,"

Vail said in an e-mail. "Neither side wants a war."

Investors are betting on a de-escalation in Middle East

tensions, said Sebastien Galy, senior macro strategist at Nordea

Asset Management in Luxembourg.

MSCI's broad gauge of stocks across the globe

.MIWD00000PUS gained 0.31%, while bourses in Paris, Frankfurt

and Milan rebounded. The pan-European STOXX 600 index .STOXX rose 0.17% and

emerging market stocks lost 0.15%.

On Wall Street, the Dow Jones Industrial Average .DJI rose

259.14 points, or 0.91%, to 28,842.82. The S&P 500 .SPX gained

27.79 points, or 0.86%, to 3,264.97 and the Nasdaq Composite

.IXIC added 94.44 points, or 1.04%, to 9,163.02.

Spot gold XAU= fell more than 1% to $1,554.35 an ounce,

having soared to $1,610.90 earlier in the session, its highest

since March 2013.

U.S. gold futures GCcv1 settled 0.9% lower at $1,560.20.

A report showing a surprise build in U.S. stockpiles helped

crude prices to fall.

The U.S. Energy Information Administration (EIA) said crude

inventories rose by 1.2 million barrels during the week ended

Jan. 3. EIA/S Analysts had expected a decline.

Brent LCOc1 futures fell $2.83 to settle at $65.44 a

barrel and U.S. WTI crude CLc1 settled down $3.09 at $59.61 a

barrel. WTI futures earlier hit $65.65, the highest since late

April.

U.S. Treasury yields rose after yields on the 10-year U.S.

Treasury note US10YT=RR overnight dropped to 1.705%, their

lowest in more than a month, as worried investors bought U.S.

government debt in a safe-haven move after the Iranian attack.

Benchmark 10-year notes US10YT=RR last fell 14/32 in price

to yield 1.872%, nearly 20 basis points above the low it hit

overnight following the Iranian strike. The dollar index .DXY , tracking the unit against six major

peers, rose 0.3%, with the euro EUR= down 0.37% to $1.111.

The Japanese yen weakened 0.70% versus the greenback at

109.20 per dollar.

Tensions in the Middle East https://www.reuters.com/live-events/tensions-in-the-middle-east-id2917592

Iran missile strikes jolt gold https://tmsnrt.rs/2sNtCJB

Iran strikes sends FX markets into a spin https://tmsnrt.rs/35EEV4c

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