* Oil rebounds, market corrects following OPEC
* World stocks lower, flatter Wall St threatens 6-day win
* Sterling hit as PM May's pre-election poll lead shrinks
* G7 leaders hold two days of talks in Sicily
(Recasts with higher oil prices; updates throughout)
By Hilary Russ
NEW YORK, May 26 Oil prices recovered on Friday
from some of the previous day's steep slide after investor
disappointment that OPEC curbs did not go far enough, while Wall
Street pulled back after six days of straight gains.
U.S. bond yields also stayed steady and gold saw big gains
as a risk-off sentiment and concerns about political uncertainty
took hold, with spot gold rising as far as $1,269.11, its
highest levels since May 1.
"We have had the political noise coming from Trump and the
U.S. administration and there is a certain element of
uncertainty in the markets in general, which is supporting gold.
Equities are also down," analyst Carsten Menke at Julius Baer in
Friday's partial rebound for oil prices followed a day of
downward pressure. Some market participants had priced in more
aggressive, extended output cuts from the Organization of the
Petroleum Exporting Countries.
U.S. crude rose 1.74 percent to $49.75 per barrel
and Brent was last at $52.14, up 1.32 percent on the
Sterling slid more than 1 percent following a poll showing
the ruling Conservatives' lead shrinking two weeks before an
Britain's pound tumbled to a more than four-week low of
$1.2772. It was last down 1.03 percent at $1.2806.
The dollar index rose 0.18 percent, with the euro
down 0.3 percent to $1.1175.
Wall Street saw another strong day for consumer stocks,
offset by weakness in healthcare and real estate shares. The
flattening market threatened to break a winning streak, which
included record high closes for the S&P 500 and the Nasdaq on
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.
The Dow Jones Industrial Average fell 2.1 points, or
0.01 percent, to 21,080.85, the S&P 500 gained 0.18
points, or 0.01 percent, to 2,415.25 and the Nasdaq Composite
added 1.95 points, or 0.03 percent, to 6,207.20.
In Britain, the first opinion poll since a suicide bombing
killed 22 people indicated the 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.
The pan-European FTSEurofirst 300 index lost 0.22
percent and MSCI's gauge of stocks across the globe
shed 0.10 percent.
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
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 and Eric Onstad in
London, Tanya Agrawal in Bengaluru and Richard Leong and Julia
Simon in New York; Editing by Nick Zieminski)