GLOBAL MARKETS-Stocks trade flat as recession fears simmer, gold gains

(Adds byline, closing of European markets)
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
* Wall Street slips as financial stocks weight
* U.S. 10-year TIPS yields slip into negative rates
* Japanese yen slips on dollar, oil gains

By Sinéad Carew and Herbert Lash
NEW YORK, Aug 27 (Reuters) - A gauge of global equities
traded little changed on Tuesday, pulled lower by sliding stocks
on Wall Street as prospects of a U.S.-China trade deal remained
uncertain and demand for U.S. Treasuries and precious metals
rose on recession fears.
Gold futures rose as recession concerns gripped investors
even as U.S. consumer confidence fell less than expected in
August, with households still upbeat about the labor market
despite an escalation in the ongoing U.S.-Sino trade spat.
An inversion of the U.S. yield curve deepened to levels last
seen in 2007, leading yields on 10-year Treasury Inflation
Protected Securities (TIPS) to slip deeper into negative
territory on strong demand for bonds. An inverted yield curve occurs when the return on
shorter-dated government debt is greater than 10-year or
longer-dated securities, an infrequent occurrence that can
signal recession.
"The inverted yield curve is certainly a recessionary
signal," said Chris Gaffney, president of world markets at TIAA
Bank.
Remarks by U.S. President Donald Trump that China had
offered to resume trade talks eased some investor concerns,
though uncertainty prevailed as Beijing declined to confirm the
president's assertion. MKTS/GLOB
U.S. stocks initially opened higher, building on Monday's
advance, on Trump's comments. China's foreign ministry, however,
reiterated that it had not received any recent U.S. telephone
calls on trade. "You have this degree of uncertainty and what has seemed to
be a period of heightened uncertainty," said Bill Northey at
U.S. Bank Wealth Management in Minneapolis.
Financial shares .SPSY , which tend to weaken in lower rate
and soft economic environments, lost 0.89% on Wall Street.
Ten-year Treasuries US10YT=RR rose 16/32 in price to push
their yield down to 1.4895%.
MSCI's gauge of stocks across the globe .MIWD00000PUS
gained 0.01%. The FTSEurofirst 300 index .FTEU3 of leading
regional shares closed up 0.61% while MSCI's emerging market
index .MSCIEF rose 0.3&.
The Dow Jones Industrial Average .DJI fell 110.43 points,
or 0.43%, to 25,788.4. The S&P 500 .SPX lost 10.12 points, or
0.35%, to 2,868.26 and the Nasdaq Composite .IXIC dropped
36.18 points, or 0.46%, to 7,817.55.
The dollar fell modestly against the Japanese yen while the
euro also declined against the greenback.
The dollar index .DXY fell 0.09%, with the euro EUR=
down 0.07% to $1.1092. The Japanese yen strengthened .JPY=
0.34% versus the greenback at 105.79 per dollar.
Oil prices rose in highly volatile trade, buoyed by
expectations of a drawdown in U.S. crude inventories, though
gains were capped by worries about a recession and uncertainty
over a China-U.S. trade deal.
Global benchmark Brent crude LCOc1 was rose 81 cents to
settle at $59.51 a barrel. U.S. West Texas Intermediate crude
CLc1 gained $1.29 to settle at $54.93 a barrel.
U.S. crude oil inventories were forecast to have fallen by
over 2 million barrels last week, a Reuters poll showed, ahead
of industry data after the market closes.
U.S. gold futures for December GCcv1 settled up 1% at
$1,551.80 an ounce.