* Trump fires controversial chief strategist Bannon
* Wall St recoups losses after reports of Bannon's exit
* Dollar pares losses, hits session high vs Swiss franc
* European shares fall; Barcelona attack weakens travel stocks (Updates with U.S. prices, adds commentary, changes byline, previous dateline London)
By Sinead Carew
NEW YORK, Aug 18 (Reuters) - U.S. stocks rebounded in a volatile session on Friday, while the dollar cut losses and bond yields rose to session highs, as reports emerged U.S. President Donald Trump fired his controversial chief strategist Steve Bannon.
President Donald Trump fired chief strategist Steve Bannon on Friday, the White House announced, ending the turbulent tenure of a rabble-rousing conservative media entrepreneur and political activist who was a darling of Trump's base. a lot of hopeful people thinking that, you know what, he has been a divisive figure in the White House," said Peter Costa, President of Empire Executions. "Getting rid of him might be a good deal for the president."
Gold turned negative after the reports, which seemed to turn investor focus away from uncertainty over Trump policy and nerves over terrorist attacks in Spain. has alienated Republican colleagues, corporate leaders and overseas allies this week with several controversial comments after violence related to a white nationalist protest in Virginia last weekend. criticism of removals of U.S. Confederate monuments that celebrate defenders of slavery sent shivers through markets as investors bet that the stance would hurt Trump's ability to build enough consensus to deliver growth boosts such as tax reform and stimulus spending.
"It appears they've gotten so bogged down in the politics of Confederate monuments, everybody thinks they're incapable of delivering meaningful change," said Bruce McCain, chief investment strategist at Key Private Bank in Cleveland.
Months of relatively low volatility did not help.
"We've been overly complacent for an extended period of time, and the normal anxieties in the market are beginning to reawaken," said McCain.
The Dow Jones Industrial Average .DJI rose 20.73 points, or 0.1 percent, to 21,771.46, the S&P 500 .SPX gained 7.13 points, or 0.29 percent, to 2,437.14 and the Nasdaq Composite .IXIC added 26.79 points, or 0.43 percent, to 6,248.70. consumer sentiment rebounded in early August from an eight-month low in July, reflecting confidence in the economic outlook and personal finances. dollar index .DXY fell 0.13 percent, with the euro EUR= up 0.25 percent to $1.1752. Japanese yen strengthened 0.10 percent versus the greenback at 109.48 per dollar. The dollar had hit its lowest point in a week against the yen earlier in the session.
Benchmark 10-year notes US10YT=RR last fell 3/32 in price to yield 2.2062 percent, from 2.197 percent late on Thursday.
Spot gold XAU= dropped 0.1 percent to $1,285.97 an ounce to the highest since last November XAU= and on track for its second week of gains.
Oil prices rose as the stock market strengthened and the U.S. dollar weakened, though investors remained worried about the global oil glut. crude CLcv1 rose 2.8 percent to $48.41 per barrel and Brent LCOcv1 was last at $52.59, up 3.06 percent on the day.
The pan-European FTSEurofirst 300 index .FTEU3 lost 0.73 percent and MSCI's gauge of stocks across the globe .MIWD00000PUS shed 0.08 percent. Investors had reacted a terrorist attack in Barcelona by selling shares in airlines. Madrid shares fell 0.8 percent .IBEX . MSCI world stocks and U.S. 10-year Treasury yields
http://reut.rs/2iaFMG4 World FX rates in 2017
http://tmsnrt.rs/2egbfVh Global assets in 2017
http://reut.rs/1WAiOSC Global bonds dashboard
http://tmsnrt.rs/2fPTds0 Global market cap
http://reut.rs/2mcp7T1 Emerging markets in 2017
http://tmsnrt.rs/2ihRugV
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>