* Record high for S&P 500 fails to inspire markets
* Manafort conviction and Cohen guilty plea add uncertainty
* Dollar steadies after five sessions of heavy selling
* EM stocks extend gains on dollar fall
* Graphic: Earnings growth in U.S. and Europe: https://reut.rs/2LkECRE
* Graphic: World FX rates in 2018 http://tmsnrt.rs/2egbfVh
By Helen Reid
LONDON, Aug 22 (Reuters) - Stocks faltered and bonds rose on Wednesday as U.S. President Donald Trump's political position was threatened by the criminal convictions of two former advisers, while the U.S. dollar steadied after five consecutive days of losses.
S&P 500 futures turned lower as markets digested the conviction of Trump's former campaign chairman on eight counts of financial wrongdoing and a guilty plea by his former personal lawyer in separate cases the immediate market reaction was not large, the developments represented further uncertainty over Trump's leadership for investors to navigate.
U.S. bond yields US10YT=RR dropped as investors sought safety in Treasuries, and a dip in S&P 500 futures spread to European shares, which opened lower.
U.S. 10-year yields were trading at 2.8297 percent, compared with Tuesday's close of 2.844 percent.
"Trump has weathered quite a few allegations before this, where many people were quick with the `I' word (impeachment), so we need to see whether this could open a new chapter or if it will calm down again and markets move on," said Commerzbank (DE:CBKG) rates strategist Christoph Rieger.
MSCI's all-country world stock index .MIWD00000PUS was unmoved by the uncertainty, rising 0.1 percent after the S&P 500 .SPX hit a record intraday high of 2,873.23, topping the 2,872.87 set on Jan. 26.
The index was poised for the longest-running bull market in its history. Its relentless rise highlights the divergence in fortunes between U.S. stocks - turbo-charged by tax cuts and share buybacks - and the rest of the world.
Year-on-year earnings growth in the U.S. is expected to be around 24 percent this year. Europe is forecast to deliver around 9 percent.
European shares were muted as the market awaited U.S.-China trade talks, set to resume under the cloud of Trump's prediction that they would make no real progress key point is these are mid-level officials," said Donough Kilmurray, managing director and head of the Investment Strategy Group for EMEA at Goldman Sachs (NYSE:GS). "It's good they are talking, but at that level of engagement we doubt anything significant will come out of it."
The U.S. dollar inched up, however, after heavy selling following Trump's criticism of the Federal Reserve's rate rises in a Reuters interview dollar index .DXY was 0.1 percent higher at 95.334, while the euro EUR= fell 0.1 percent on the day at $1.1558.
EMERGING MARKETS RELIEF?
Emerging-market stocks .MSCIEF climbed 0.3 percent, leaving 13-month lows further behind as the dollar's losses helped ease pressure on EM assets, which entered bear territory last week.
"If you look at the transmission from economic growth to earnings growth to shareholder returns, it's strongest in the U.S., it's ok in Europe and pretty weak in EM," said Goldman's Kilmurray, who has been underweight emerging markets for five years.
"The question we're getting asked now by investors is whether what we see in EM is a sign that something bigger is going wrong in the global economy. Our answer to that is no, these issues have been local issues," he said.
The threat of more U.S. sanctions on Russia hit the rouble RUB= and backed the market's view that Russian sanctions would increase in severity regardless of the Trump administration investors sold shares across the board, sending the Shanghai Composite index .SSEC down 0.5 percent, after the country's central bank said it would not resort to strong stimulus to support growth were also looking to Wednesday's release of minutes from the U.S. Federal Reserve's August meeting and a speech by Fed Chairman Jerome Powell on Friday for clues on future rate hikes.
"This could present the opportunity for the Fed to discuss longer-term issues, potentially including discussion around the balance sheet and the implementation of monetary policy," said Jim Reid, strategist at Deutsche Bank (DE:DBKGn).
In commodity markets, U.S. crude CLc1 rose 0.7 percent to $66.29 a barrel and Brent crude LCOc1 climbed 0.8 percent to $73.24 per barrel.
Copper prices declined ahead of the U.S.-China trade talks. gold XAU= slipped from a one-week high, down 0.2 percent to $1,193.87 an ounce. GOL/
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