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Stocks seesaw, dollar off; global, U.S. worries weigh

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NEW YORK (Reuters) - Stocks oscillated between positive and negative territory on Wednesday as worries over U.S. politics, global economic growth and trade tensions offset a boost from quarterly earnings reports.

The U.S. dollar and oil prices also declined.

U.S. Treasury yields climbed but analysts expect the $15.6 trillion market to be confined within a tight trading range due to a dearth of incentives from fresh economic data amid the longest-ever U.S. government shutdown.

The U.S. dollar failed to maintain small gains from earlier in the session as uncertainties kept investors on the sidelines and the yen fell after the Bank of Japan kept its stimulus program in place.

“The trade conflicts and tensions, the (U.S. government) shutdown and certainly more chatter about global growth in 2019, those are the factors that need to be hashed out before we get a clear direction,” said Minh Trang, senior currency trader at Silicon Valley Bank in Santa Clara, California.

After falling more than 1 percent a day ago, the S&P 500 zig-zagged, while Nasdaq was in the red.

Strong quarterly reports from Procter & Gamble, Comcast Corp and International Business Machines helped the Dow show gains for much of the day.

But U.S. political uncertainty weighed heavily on investors.

White House economic adviser Kevin Hassett said in a CNN interview the United States could see zero growth in the first three months if the partial government shutdown is extended for the whole quarter.

“What we’re seeing here is a very indecisive market and a market that’s very sensitive to headline news on trade and the shutdown,” Peter Cardillo, chief market economist at Spartan Capital Securities in New York referring to Hassett’s comment.

And according to Cardillo, it didn’t help investor mood that a public argument had erupted between U.S. President Donald Trump and U.S. House of Representatives Speaker Nancy Pelosi over whether Trump can deliver the annual State of the Union address in the House chamber during the shutdown.

“The longer the bickering goes on the longer the shutdown goes on and everyone gets affected if the economy slows,” he said.

The Dow Jones Industrial Average rose 156.97 points, or 0.64 percent, to 24,561.45, the S&P 500 gained 3.4 points, or 0.13 percent, to 2,636.3 and the Nasdaq Composite dropped 4.95 points, or 0.07 percent, to 7,015.40.

MSCI’s gauge of stocks across the globe was last up 0.08 percent, while the pan-European STOXX 600 index lost 0.06 percent.

Investors also kept a close eye on China on hopes more economic stimulus measures would ease worries over slow progress in trade talks between Washington and Beijing.

Trump said he would not soften his position that Beijing must make real structural reforms, including how it handles intellectual property, to reach a trade deal, advisers said.

The dollar index, which tracks the greenback versus the euro, yen, sterling and three other currencies, was down 0.18 percent at 96.129. The index has risen nearly 1 percent over the last two weeks.

The greenback was up 0.22 percent against the yen after the Bank of Japan on Wednesday kept its stimulus program in place.

Benchmark 10-year notes last fell 6/32 in price to yield 2.7516 percent, from 2.732 percent late on Tuesday.

Oil prices sank, following U.S. stocks down, on concerns about global economic weakness, forecasts for record U.S. shale production and lower U.S. gasoline prices. [O/R]

U.S. crude settled down 0.74 percent or 39 cents at $52.62 per barrel. Brent crude futures settled at $61.14 per barrel, down 36 cents, or 0.59 percent.

Additional reporting by Saqib Iqbal Ahmed, April Joyner, Richard Leong and Lewis Krauskopf in New York, Josephine Mason, Sujata Rao and Helen Reid in LONDON. Hideyuki Sano and Shinichi Saoshiro in TOKYO; Editing by Bernadette Baum and Susan Thomas

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