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U.S. indexes turn red after hitting records

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China shares surge again on stimulus rush

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Fed's Powell to speak ahead of payrolls test

(Updated prices at 11:30 a.m ET/ 1530 GMT)

By Sinéad Carew and Nell Mackenzie

NEW YORK/LONDON, Sept 30 (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.

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.