GLOBAL MARKETS-Pound, stocks slip as lawmakers reject Brexit law timetable

* Sterling falls after Brexit vote
* S&P 500 reverses earlier gains to end lower
* United States, China sound upbeat on trade talks

(Updates to closing U.S. markets' levels)
By Caroline Valetkevitch
NEW YORK, Oct 22 (Reuters) - The pound weakened and stocks
on world markets declined on Tuesday after British lawmakers
rejected the government's proposed timetable for passing
legislation to ratify its deal to exit the European Union.
U.S. Treasury yields dropped in line with sterling's
movements as investors bought safe-haven debt after the defeat
in parliament, which made ratification of British Prime Minister
Boris Johnson's deal by the Oct. 31 deadline almost impossible.
Johnson said afterward it was up to the EU to decide whether
it wanted to delay Brexit and for how long.
The pound fell further on the news. Sterling GBP= was last
trading at $1.2887, down 0.55% on the day.
"There was optimism into this (the vote) that perhaps they
could move forward. To have had a solution to Brexit would have
eliminated one of the uncertainties that has hovered over the
market for the last couple of years," said Quincy Krosby, chief
market strategist at Prudential Financial in Newark, New Jersey.
Stocks were mostly higher earlier amid some upbeat earnings
and talk of progress in the U.S.-China trade negotiations.
Upbeat forecasts from Procter & Gamble Co PG.N and United
Technologies Corp UTX.N were offset by disappointing results
from McDonald's Corp MCD.N and Travelers Cos Inc TRV.N ,
which added to the day's downbeat tone.
The Dow Jones Industrial Average .DJI fell 39.54 points,
or 0.15%, to 26,788.1, the S&P 500 .SPX lost 10.73 points, or
0.36%, to 2,995.99 and the Nasdaq Composite .IXIC dropped
58.69 points, or 0.72%, to 8,104.30. The pan-European STOXX 600 index .STOXX rose 0.09% and
MSCI's gauge of stocks across the globe .MIWD00000PUS shed
0.14%.
In the U.S. bond market, benchmark 10-year notes US10YT=RR
last rose 7/32 in price to yield 1.7677%, from 1.792% late on
Monday.
IShares MSCI Turkey exchange-traded fund TUR.O pared its
gains and was last up 2% after a report by Turkish broadcaster
NTV that Turkish President Tayyip Erdogan said the United States
has not fully kept its promises agreed in last week's temporary
truce in northeastern Syria. The Canadian dollar fell 0.08% versus the greenback at 1.31
per dollar. The ruling Liberal government of Justin Trudeau held
on to power, but with a minority government after a closely
fought election. Chilean markets recovered from Monday's losses, with
investors comforted by President Sebastian Pinera's willingness
to listen to demands by protesters after violence over the
weekend hammered markets last session. Chile's peso CLP= strengthened after a 2.7% slump on
Monday - its worst day in more than six years.
On the trade front, China and the United States have
achieved some progress in their trade talks, Vice Foreign
Minister Le Yucheng said on Tuesday, adding that as long as both
sides respected each other, any problem could be resolved.
That followed upbeat comments on Monday by the White House.
U.S. President Donald Trump said efforts to resolve the
U.S.-China dispute were going well, while White House economic
adviser Larry Kudlow said tariffs on Chinese goods scheduled for
December could be withdrawn if talks go well. In commodities, Brent crude oil LCOc1 settled up 74 cents,
or 1.3% at $59.70 a barrel, while U.S. West Texas Intermediate
crude CLc1 was 85 cents, or 1.6%, higher at $54.16.

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