GLOBAL MARKETS-Stocks reverse losses, Treasury yields dip following remarks by Fed's Powell

* Gold slips, dollar advances
* Oil prices cool after Saudi production pledge

(Updates to market close)
By Stephen Culp
NEW YORK, Sept 18 (Reuters) - The S&P 500 and the Dow
reversed losses to close higher on Wednesday and U.S. Treasury
yields slipped after remarks by Federal Reserve Chair Jerome
Powell tempered the market's initial reaction to the U.S.
central bank's policy statement.
All three major U.S. stock indexes initially extended
earlier losses following the release of the Fed's policy
decision after the close of a two-day meeting, which dimmed
hopes for further rate cuts and fell short of the more
aggressive reduction in borrowing costs that President Donald
Trump had demanded.
The U.S. central bank, on a 7-3 vote, lowered the Fed funds
target rate to a range of 1.75% to 2.00% "in light of the
implications of global developments for the economic outlook as
well as muted inflation pressures," although it said the U.S.
economy continues to grow at a "moderate" pace and the labor
market "remains strong." But stocks reversed their slide during Powell's news
conference following the policy decision, during which he said
the Fed is closely monitoring economic data, trade and global
growth risks, but did not see imminent recession, or think the
central bank would cut rates to negative territory.
"This type of reaction we see almost every time from the Fed
decisions," said Rick Meckler, partner at Cherry Lane
Investments in New Vernon, New Jersey. "The first move is from
the people who think it's not enough, and at the end of the day
people conclude that they did exactly what investors expected
them to do. Those people who got what they expected used the
selloff to buy, and I think that's what happened here."
The Dow Jones Industrial Average .DJI rose 36.28 points,
or 0.13%, to 27,147.08, the S&P 500 .SPX gained 1.03 points,
or 0.03%, to 3,006.73, and the Nasdaq Composite .IXIC dropped
8.62 points, or 0.11%, to 8,177.39.
The MSCI world equity index .MIWD00000PUS , which tracks
shares in 47 countries, fell 0.06%.
U.S. Treasury yields dipped following Powell's remarks.
Benchmark 10-year notes US10YT=RR last rose 7/32 in price
to yield 1.7909%, from 1.814% late on Tuesday. The 30-year bond
US30YT=RR last rose 23/32 in price to yield 2.2471%, from
2.28% late on Tuesday.
The dollar strengthened following the Fed's rate cut.
The dollar index .DXY rose 0.28%, with the euro
EUR= down 0.36% to $1.1031.
The Japanese yen weakened 0.26% versus the greenback at
108.44 per dollar, while sterling GBP= was last trading at
$1.2483, down 0.14% on the day.
Oil prices edged lower after Saudi Arabia said it would
quickly restore full production following last week's attack on
its facilities and as U.S. crude stockpiles unexpectedly
increased. Tension in the Middle East remained elevated, however. Saudi
Arabia on Wednesday displayed remnants of what it described as
Iranian drones and cruise missiles used in the attack, calling
them "undeniable" evidence of Iranian aggression. Trump ordered
a major increase in sanctions on Iran on Wednesday, following
repeated U.S. assertions that Iran was behind the attack.
U.S. crude oil futures settled down 2.07% at $58.11 per
barrel, while Brent crude oil futures settled at $63.60 per
barrel, a 1.47% decline.
Spot gold reversed early gains after the Fed released its
statement. Spot gold XAU= dropped 0.6% to $1,492.81 an ounce.
Copper CMCU3 lost 0.27% to $5,805.00 a tonne.

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Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
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