* S&P 500, Dow edge higher
* Benchmark 10-yields rise
* Yield curve further flattens
* Dollar gains
* Oil prices decline 2%
* Safe-have gold drops
NEW YORK, Aug 16 (Reuters) - Global equity markets were flat
while U.S. Treasury yields rose on Tuesday as recession worries
persisted amid concern the Federal Reserve will continue its
steep interest rate hikes despite nascent signs of a slowdown in
The yield curve between two- and 10-year Treasury notes
, viewed as an indicator of impending recession,
remained inverted at minus 38.60 basis points on Tuesday.
"It seems that the bond market doesn't quite reflect the
inflation happening in the economy," said George Young, a
portfolio manager at Villere & Company in New Orleans.
"The weird thing is that in the last couple of weeks bond
yields have gone up and stayed up so there's kind of a
disconnect. There's kind of a question maybe inflation isn't
that bad and we may actually be going into a recession. Market
participants are all over the place," he added.
MSCI's gauge of stocks in 50 countries across the globe
were up just 0.04%. Overnight in Asia, MSCI's
broadest index of Asia-Pacific shares outside Japan
closed 0.07% lower, while Japan's Nikkei
U.S. Treasury yields edged higher as encouraging data from
U.S. retail giants suggested the U.S. Federal Reserve has room
to further raise rates to cool inflation. Benchmark 10-year
Treasury yields were at 2.844% from 2.791% on Monday
On Wall Street, the benchmark S&P 500 and the Dow reversed
earlier losses and were trading higher, with stocks in consumer
discretionary, financials and consumer staples leading the
The Dow Jones Industrial Average rose 0.47% to
34,071.45, the S&P 500 lost 0.01% to 4,296.5 and the
Nasdaq Composite dropped 0.52% to 13,059.82.
Oil prices dropped more than 2% in volatile trading as
recession worries raised uncertainty over global crude demand,
even as markets awaited clarity on talks to revive a deal that
could allow more Iranian oil exports.
Brent crude futures fell 2.5% to $92.72 a barrel,
after hitting a session high of $95.95. West Texas Intermediate
crude (WTI) decreased 2.72% to $86.98 a barrel, after
rising to $90.65.
The dollar gained as the greenback benefited from
expectations the U.S. economy will be stronger than peers in the
event of a slowdown in growth. The dollar index rose
0.085%, with the euro up 0.05% to $1.0165.
Safe-haven gold fell for a second straight session on
Tuesday as a firmer dollar made the greenback-denominated metal
more expensive. Spot gold dropped 0.2% to $1,775.75 an
ounce, while U.S. gold futures fell 0.56% to $1,771.40 an
(Reporting by Chibuike Oguh; Editing by Sandra Maler)