GLOBAL MARKETS-Stocks fall, dollar rises as investors worry about trade

(Updates prices to close, changes comment, changes byline)

By Sinéad Carew

NEW YORK, Oct 7 (Reuters) - Wall Street equity indexes ended

a volatile session lower on Monday while oil prices gave up

early gains and the dollar rose as investors looked for safety

ahead of U.S.-China trade talks.

U.S. Treasury yields rose as $78 billion in note and bond

supply slated for auction this week helped push prices lower

after last week's dramatic rise. As deputy level U.S.-China trade talks kicked off on Monday,

the White House confirmed that high-level talks involving

Chinese Vice Premier Liu He, U.S. Trade Representative Robert

Lighthizer and Treasury Secretary Steven Mnuchin would start on

Thursday. Late in the session, Wall Street's major indexes briefly

turned higher after positive tweets about the trade talks. But

they then sank again as hopes for progress faded. Without a clear bet to make on the trade talks outcome,

investors appeared to see the dollar as the safest place,

according to Shawn Cruz, manager of trader strategy at TD

Ameritrade in Jersey City, New Jersey. "You can expect this (volatility) all week leading up to the

discussions with China on trade. Markets are trying to front run

the outcome," said Cruz. "Bonds and stocks will be volatile this

week. Investors don't know one way or another what the outcome

of trade discussions will be, so they're moving out of both."

The Dow Jones Industrial Average .DJI fell 95.7 points, or

0.36%, to 26,478.02, the S&P 500 .SPX lost 13.22 points, or

0.45%, to 2,938.79 and the Nasdaq Composite .IXIC dropped

26.18 points, or 0.33%, to 7,956.29.

The pan-European STOXX 600 index .STOXX rose 0.71% and

MSCI's gauge of stocks across the globe .MIWD00000PUS shed

0.19%. Emerging market stocks lost 0.35%.

Oil prices settled slightly lower, paring early gains as

hopes of a comprehensive U.S.-China trade deal faded and a new

poll showed analysts expect U.S. crude oil inventories to have

risen last week. Hopes of U.S.-China trade progress had helped

lift oil prices earlier in the session. O/R

Brent Crude futures LCOc1 settled down 2 cents at $58.35

and U.S. crude CLc1 finished down 6 cents at $$52.75.

The dollar edged higher against a basket of major

currencies, but Turkey's lira slid to its lowest level against

the dollar in more than a month after the White House said

Ankara would soon launch unilateral military operations in

northeast Syria.

The Turkish lira lost 2.45% versus the U.S. dollar at 5.84,

its weakest in over a month. A move above 5.8577 would send the

currency to its weakest since June.

U.S. President Donald Trump later threatened to "totally

destroy and obliterate the Economy of Turkey" if Ankara does

anything "off limits." The dollar index .DXY rose 0.17%, with the euro EUR=

down 0.05% to $1.097. The Japanese yen weakened 0.31% versus the greenback at

107.30 per dollar, while Sterling GBP= was last trading at

$1.2294, down 0.30% on the day.

U.S. Treasury yields drifted higher, with benchmark 10-year

notes US10YT=RR last down 14/32 in price to yield 1.5614%,

from 1.514% late on Friday.

Spot gold XAU= dropped 0.8% to $1,492.26 an ounce. U.S.

gold futures GCcv1 fell 0.98% to $1,491.40 an ounce.

Global assets in 2019 http://tmsnrt.rs/2jvdmXl

Global currencies vs. dollar http://tmsnrt.rs/2egbfVh

Emerging markets in 2019 http://tmsnrt.rs/2ihRugV

MSCI All Country Wolrd Index Market Cap http://tmsnrt.rs/2EmTD6j

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