Global stock index falls after record, oil turns higher

By Sinéad Carew and Nell Mackenzie

NEW YORK/LONDON (Reuters) -MSCI's global equities index was lower on Monday after hitting a record on Friday, while oil prices turned higher in a choppy session amid geopolitical worries.

Continued Israeli strikes across Lebanon added uncertainty to the mix, though oil price gains were still restrained by the risk of increased supply. [O/R]

Investors were waiting on a public appearance by Federal Reserve chair Jerome Powell on Monday and also preparing for major U.S. economic data including a payrolls report that could decide whether the Fed makes another big rate cut in November.

With the S&P 500 and the Dow hitting record highs in recent days, investors were taking a cautious approach, according to Rick Meckler, partner, Cherry Lane Investments, a family investment office in New Vernon, New Jersey.

"In a broad sense the market's reached some kind of equilibrium. The Fed cuts to come are keeping people from selling but the high valuation on stocks is preventing many investors from buying here so you're mostly seeing rotation," said Meckler.

A host of Fed speakers will have their say this week, led by Powell later on Monday. Also due are data on job openings and private hiring, along with ISM surveys on manufacturing and services.

Wall Street was helped last week by a benign reading on core U.S. inflation on Friday that left the door open to another half-point rate cut from the Fed.

But Monday was a mixed bag in U.S. stocks. At 11:30 a.m. the Dow Jones Industrial Average fell 127.55 points, or 0.30%, to 42,186.50, the S&P 500 fell 0.76 points, or 0.01%, to 5,737.41 and the Nasdaq Composite rose 19.19 points, or 0.11%, to 18,138.78.

MSCI's gauge of stocks across the globe fell 3.62 points, or 0.42%, to 849.22 while Europe's STOXX 600 index fell 0.95%.

Earlier, China's equity indexes rallied sharply after Beijing's latest raft of stimulus policies.

China government stimulus measures announced last week continued to boost stock markets, with the blue-chip CSI300 closing up 8.5%, its biggest daily gain since 2008 adding to its 25% run-up in the last five trading sessions.

The Shanghai Composite climbed about 8%, on top of last week's almost 13% rally.

In currencies, the dollar gained against the yen but dipped against the euro as investors waited on economic data releases for Fed policy clues, while China's stimulus helped push the Australian dollar to a more than 19-month high.

The euro zone releases inflation figures this week, along with producer prices and unemployment.

The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, rose 0.16% to 100.60.

The euro down 0.13% at $1.1149 and against the Japanese yen, the dollar strengthened 0.74% to

143.25.

In Treasuries, the yield on benchmark U.S. 10-year notes rose 3 basis points to 3.779%, from 3.749% late on Friday while the 30-year bond yield rose 2.4 basis points to 4.1218% from 4.098%.

The 2-year note yield, which typically moves in step with interest rate expectations, rose 4.9 basis points to 3.6124%, from 3.563% late on Friday.

U.S. oil prices were higher on the day but on track to fall for the third month in a row with investors balancing a strong supply outlook and questions around demand against fears of escalating conflict in the Middle East.

U.S. crude rose 0.82% to $68.77 a barrel and Brent fell to $71.92 per barrel, down 0.08% on the day.

Gold eased on Monday, taking a breather after a historic rally driven by U.S. monetary easing and heightened Middle East tensions, which puts it on course for its biggest quarterly gain since early 2020.

Spot gold fell 0.95% to $2,632.82 an ounce. U.S. gold futures fell 0.48% to $2,631.70 an ounce.

(Reporting by Sinéad Carew, Nell Mackenzie, Dhara Ranasinghe and Wayne Cole; Editing by Susan Fenton, Toby Chopra and Keith Weir)