*

Wall Street, MSCI index stay close to flat

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Fed Chair Powell gives no new direction on rate cuts

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European defence stocks jump after Trump's comments on

Ukraine

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US new home sales show upside surprise

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(Updates prices after U.S. stock market open)

By Sinéad Carew and Amanda Cooper

NEW YORK/LONDON, Sept 24 (Reuters) - MSCI's global

equities gauge stayed close to flat on Wednesday while the

dollar rose and gold prices dipped as investors digested

cautious comments from Federal Reserve Chair Jerome Powell about

when the central bank might next cut U.S. interest rates.

In his first remarks since the Fed meeting ended with a rate

cut last week, Powell on Tuesday underlined the need for

policymakers to balance the competing risks of high inflation

and a weaker jobs market in its next monetary policy decisions.

However, traders were still pricing in a rate cut in

October, according to CME Group's FedWatch tool.

In Europe, defence stocks jumped after U.S.

President Donald Trump said he believed Ukraine could retake all

its land occupied by Russia, marking a sudden shift in rhetoric

in Kyiv's favour.

TRUMP CRITICISES WESTERN NATIONS

In a speech to the U.N. General Assembly, in which he

rejected moves by allies to recognise a Palestinian state, Trump

chastised Western nations for their approach to climate change

and immigration, telling leaders "your countries are going to

hell".

After boasting record highs on Monday, Wall Street stocks

were barely changed while safe-haven gold prices edged down from

their Tuesday record highs.

"Gold is still digesting some of the commentary coming

out of the Federal Reserve yesterday and also geopolitical

tensions with Russia. It's finding some support here, but

slightly cautious ahead of some economic data coming out," said

Phillip Streible, chief market strategist at Blue Line Futures.

Spot gold fell 0.35% to $3,750.30 an ounce. U.S.

gold futures dropped 0.36% to $3,767.10 an ounce.

Investors are waiting for the Fed's preferred inflation

measure, due out on Friday this week.

Meanwhile, Wednesday's data showed sales of new U.S.

single-family homes surging in August by 20.5% to a

seasonally-adjusted annualized rate of 800,000 units. Economists

polled by Reuters had forecast a drop to 650,000 units. July

sales were revised up to 664,000 units from the 652,000

previously reported.

On Wall Street at 10:54 a.m. the Dow Jones Industrial

Average rose 81.67 points, or 0.17%, to 46,374.45, the

S&P 500 rose 2.90 points, or 0.04%, to 6,659.82 and the

Nasdaq Composite rose 6.20 points, or 0.03%, to

22,579.68.

MSCI's gauge of stocks across the globe .MIWD00000PUS>

fell 0.27 points, or 0.03%, to 981.89 while the pan-European

STOXX 600 index rose 0.01%.

In government bond markets,

U.S. Treasury yields ticked up with Powell's remarks in

focus.

The yield on benchmark U.S. 10-year notes rose

1.5 basis points to 4.133%, from 4.118% late on Tuesday while

the 30-year bond yield climbed 0.9 basis points to

4.7458%.

The 2-year note yield, which typically moves

in step with interest rate expectations for the Federal Reserve,

was up 2.6 basis points to 3.596%.

U.S. DOLLAR RISES, EURO DOWN

In currencies, the U.S. dollar rose on Wednesday, after

declining in the first two sessions of the week, as investors

took cues from Powell's tone even though traders still priced in

two more rate cuts this year.

The dollar index, which measures the greenback

against a basket of currencies including the yen and the euro,

rose 0.61% to 97.83.

The euro was down 0.64% at $1.1739 while against

the Japanese yen, the dollar strengthened 0.72% to

148.69.

Sterling weakened 0.53% to $1.345 and against the

Swiss franc, the dollar rose 0.43% to 0.794.

Oil prices increased over 1% on Wednesday as an industry

report showed U.S. crude inventories declined last week, adding

to a sense in the market of tightening supplies amid export

issues in Kurdistan and Venezuela and disruptions to Russian

supplies.

U.S. crude rose 1.51% to $64.37 a barrel and Brent

increased $68.58 per barrel, up 1.4% on the day.

In cryptocurrencies, bitcoin gained 1.63% to

$113,866.90. Ethereum rose 0.57% to $4,201.83.