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Global stock index sticks close to Thursday's record

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Consumer sentiment dips to lowest since May

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Dollar rises with Treasury yields

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Gold trading near record highs

(Adds US consumer sentiment survey in paragraph 3, analyst

comment in paragraphs 6,7)

By Sinéad Carew and Iain Withers

LONDON/SYDNEY, Sept 12 (Reuters) - MSCI's global

equities index stayed close to Thursday's record levels while

the dollar and U.S. Treasury yields rose on Friday after going

into reverse in the prior session when expectations climbed for

U.S. rate cuts.

Gold was on track for a fourth weekly gain in a row and

traded near record levels, potentially signalling persistent

investor uncertainties about the global economy.

The University of Michigan's Surveys of Consumers showed

that U.S. consumer sentiment fell for a second straight month in

September to its lowest point since May as consumers saw rising

risks to business conditions, the labor market and inflation.

European stocks gave up earlier gains to trade slightly

lower. Stock markets across Asia made strong gains and Chinese

stocks hit a 3-1/2 year high, spurred by AI-related earnings

growth expectations.

Wall Street was a mixed bag after all three of its main

indexes registered record closing highs on Thursday, when

investors reacted bullishly to weaker-than-expected jobs data by

ramping up bets that the Federal Reserve would make three rate

cuts in a row, including a cut on Sept 17 after its meeting.

"The market feels a little stretched and toppy. And now

investors in the market are going to focus on next Wednesday and

exactly what Jay Powell says, how he says it. Does he sound more

dovish? What lines did he delete? What lines did he add?," said

Kenny Polcari, partner and chief market strategist at Slatestone

Wealth in Jupiter, Florida, referring to Fed Chair Jerome

Powell's press conference and the Fed's written statement.

"Rates are going lower for sure but I do think the

market has gotten ahead of itself in terms of valuation."

Thursday's U.S. consumer price report had been seen as

the last major hurdle to the Federal Reserve cutting interest

rates next week. While prices showed a bigger-than-expected

increase, market participants kept their focus on a separate

report that showed a sharp rise in unemployment claims.

On Wall Street at 10:53 a.m. the Dow Jones Industrial

Average fell 181.21 points, or 0.39%, to 45,927.30, the

S&P 500 rose 2.16 points, or 0.03%, to 6,589.63 and the

Nasdaq Composite rose 88.75 points, or 0.40%, to

22,131.82.

MSCI's gauge of stocks across the globe

rose 1.11 points, or 0.11%, to 972.56.

The pan-European STOXX 600 index fell 0.05% after

rising earlier in the day.

In currencies, the dollar pared some gains after signs of

weakening consumer sentiment. The dollar index, which

measures the greenback against a basket of currencies including

the yen and the euro, rose 0.13% to 97.68.

Against the Japanese yen, the dollar strengthened

0.31% to 147.65 after U.S. and Japanese finance ministers on

Friday released a statement reaffirming that neither country

would target currency levels in their policies.

The euro was down 0.09% at $1.1722. On Thursday the

European Central Bank kept rates unchanged and signalled that it

was in a "good place" on policy. After the meeting, ECB sources

told Reuters the December meeting would be the most realistic

time frame to debate whether another cut was needed to buffer

the economy.

Britain's economy recorded zero monthly growth in July, in

line with forecasts but showing a sharp drop in factory output,

weighing on sterling which fell 0.13% to $1.3555.

In U.S. Treasuries, the yield on benchmark U.S. 10-year

notes rose 5.3 basis points to 4.064%, from 4.011%

late on Thursday while the 30-year bond yield rose

4.5 basis points to 4.696%.

The 2-year note yield, which typically moves in

step with interest rate expectations for the Federal Reserve,

rose 2.9 basis points to 3.558%, from 3.529%.

In energy markets, oil prices rose by nearly 2% on Friday

after a Ukrainian drone attack on a Russian port suspended

loadings, outweighing pressure from oversupply concerns and

weaker U.S. demand risks.

U.S. crude rose 1.35% to $63.21 a barrel and Brent

rose to $67.34 per barrel, up 1.46% on the day.

In precious metals, spot gold rose 0.4% to $3,648.39

an ounce. U.S. gold futures rose 0.31% to $3,648.00 an

ounce.