(Adds U.S. markets open, dateline, byline; previous LONDON)
* Rate worry keeps markets on edge as Powell testifies
* European shares slide on poor results
* US yield curve steepens after Fed chief comments
* Oil slides on worries about crude supply, dollar
By Herbert Lash
NEW YORK, March 1 (Reuters) - The U.S. dollar rose to asix-week high on Thursday on solid U.S. economic data, butremarks by the new Federal Reserve chief that there no evidenceof an overheating economy pushed bond yields lower even asstocks wavered on Wall Street.
In his second testimony in Congress this week, Fed ChairJerome Powell also told the Senate Banking Committee that theU.S. central bank did not see any evidence of a decisive advancein wages. remarks tempered market concerns from his testimony onTuesday that sparked fears about a quicker pace of inflation.
Larry Hatheway, chief economist at GAM Investment Managementin Zurich, said there was a lack of conviction in the market asU.S. stocks traded above and below break-even and bond yieldspulled back from a recent march higher.
Trading was algorithmic or related to positioning, he said,as the market was pulled by inflation concerns on the one handand sharply higher expectations for earnings growth that strongglobal growth was driving.
"I don't think that there are very many people who take afundamental view on markets who are changing their views much. They're all sitting back and basically watching but not acting,"Hatheway said.
The dollar index .DXY , tracking the U.S. unit against abasket of major currencies, was flat, with the euro EUR= up0.16 percent to $1.2212. The Japanese yen JPY= weakened 0.25percent versus the greenback at 106.97 per dollar.
MSCI's gauge of stocks across the globe .MIWD00000PUS shed0.25 percent, but the pan-European FTSEurofirst 300 index .FTEU3 of leading regional shares lost 1.26 percent to closeat a provisional 516.59.
The Dow Jones Industrial Average .DJI fell 46.77 points,or 0.19 percent, to 24,982.43. The S&P 500 .SPX lost 3.23points, or 0.12 percent, to 2,710.6 and the Nasdaq Composite .IXIC dropped 5.92 points, or 0.08 percent, to 7,267.09.
Comments by New York Fed President William Dudley stoked theembers of rate-hike fears during remarks in Sao Paulo, Brazil,where he said four rate hikes - or one more than the Fed hasforecast this year - would be gradual. gap between short-dated U.S. borrowing costs and thosein Germany was at its widest in over 20 years as the monetarypolicy outlooks by the Fed and European Central Bank for the tworegions diverged. consumer prices increased in January as a gauge ofunderlying inflation posting its largest gain in 12 months, buta survey showed the euro zone's factory boom slowed a littlefurther in February, pressuring euro zone yields lower. L2N1QI1U5 the U.S. we have at least three rate hikes this year,but in the euro zone, there was some exaggeration about whereinflation was heading so that is now being priced out and yieldsare moving to the downside," said DZ Bank strategist DanielLenz.
Oil fell more than 1 percent, hitting two-week lows onpressure from a strong dollar and worries that surging U.S.crude output might thwart efforts by the Organization of thePetroleum Exporting Countries to drain global supply.
U.S. crude CLcv1 fell 57 cents to $61.07 per barrel andBrent LCOcv1 was last at $63.98, down 75 cents on the day.
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http://reut.rs/2CPDYaNWorld FX rates in 2018
http://tmsnrt.rs/2egbfVh
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