* Oil rises after sharp falls
* U.S., European stocks down, tracking Asia
* Sterling hit as PM Theresa May's pre-election poll lead
* G7 leaders to hold two days of talks in Sicily
* Graphic: World FX rates in 2017 tmsnrt.rs/2egbfVh
(Changes dateline to New York, adds Wall Street open, updates
By Hilary Russ
NEW YORK, May 26 Oil prices see-sawed on Friday
after OPEC extended cuts in oil production but disappointed
investors by not going further, while sterling slid after a
poll showed the ruling Conservatives' lead shrinking two weeks
before an election.
World shares bounced around, with Wall Street turning
slightly negative after six straight days of gains as another
strong day for consumer stocks offset weakness in financial and
The Dow Jones Industrial Average fell 15.42 points,
or 0.07 percent, to 21,067.53, the S&P 500 lost 0.59
points, or 0.02 percent, to 2,414.48 and the Nasdaq Composite
added 0.19 points, or 0 percent, to 6,205.45.
European stocks fell as turbulence in oil
markets, and the prospect of tough talks at a meeting of G7
leaders met in Italy, undermined risk appetite.
Britain's pound tumbled to a more than four-week low of
$1.2772. It was last down 1.18 percent at $1.2785.
The first opinion poll since a suicide bombing killed 22
people indicated Britain's opposition Labour Party had cut the
Conservative Party's lead to five points, with less than a
fortnight to go to the parliamentary election.
Prime Minister Theresa May has said a big win would
strengthen her hand in Brexit negotiations.
"With this kind of momentum and almost two weeks to go until
the vote, not only is this not going to be the breeze that May
anticipated when she called the snap election last month, it
could yet turn into a humiliating defeat for the Conservative
leader and her party," said Craig Erlam, senior market
analyst at OANDA.
The sterling selloff was seen boding well for British
exporters, however. British stock markets bucked
the downward trend and hit record highs.
Shares in Asia dropped. MSCI's broadest index of
Asia-Pacific shares outside Japan closed 0.08
percent lower, while Japan's Nikkei lost 0.64 percent.
MSCI's gauge of stocks across the globe shed
On Thursday in Vienna, the Organization of the Petroleum
Exporting Countries (OPEC) and some non-OPEC producers agreed to
extend a cut in oil production by nine months until March 2018
as they grapple with a supply glut. But that
disappointed investors betting on longer or larger curbs.
After opening sharply lower, U.S. crude rose 0.67
percent to $49.22 per barrel and Brent was last up 0.43
percent at $51.68 on the day.
Meanwhile, analysts said there was caution in the markets
ahead of a meeting of leaders from the world's richest economies
that was expected to expose deep divisions with U.S. President
Donald Trump over trade and climate change.
The G7 summit comes after Trump criticized NATO allies'
military spending and condemned German trade policies a day
The dollar index rose 0.22 percent, with the euro
down 0.3 percent to $1.1175. The U.S. economy slowed less
than initially thought in the first quarter as gross domestic
product increased at a 1.2 percent annual rate.
Spot gold hit its highest level in nearly four weeks,
boosted by the risk-off sentiment because of political
For Reuters Live Markets blog on European and UK stock
markets see reuters://realtime/verb=Open/url=http://emea1.apps.cp.extranet.thomsonreuters.biz/cms/?pageId=livemarkets
(Additional reporting by Dhara Ranasinghe in London, Tanya
Agrawal in Bengaluru; Editing by Nick Zieminski)