GLOBAL MARKETS-Shares steady, dollar edges lower ahead of key U.S. events

(Updates prices, adds quotes)

* Russia stocks tumble anew after new sanctions

* Investors hesitant to make bets ahead of GDP, payrolls

data

* Fed expected to maintain dovish tone on Wednesday

By Angela Moon

NEW YORK, July 28 (Reuters) - World stock markets were

little changed on Monday while the U.S. dollar edged lower

against a basket of major currencies ahead of a ream of U.S.

data and events this week.

MSCI (NYSE: MSCI - news) 's All-World Index erased earlier losses

to trade flat as major U.S. stock indexes turned positive.

But equity investors were hesitant to make big bets on

concerns over new European sanctions against Moscow and ahead of

Wednesday's release of U.S. second-quarter gross domestic

product. The calendar also includes a Federal Reserve policy

announcement on Wednesday and U.S. nonfarm payrolls Friday.

The U.S. dollar edged lower against a basket of major

currencies, halting last week's strongest advance since March

but still near six-month highs. The euro last traded at

$1.3440.

The yield on U.S. two-year Treasuries notes rose to its

highest in 2-1/2 weeks early Monday afternoon after a weak $29

billion auction of new two-year notes, part of this week's $93

billion in fixed-rate debt government debt supply.

Short- and intermediate-dated debt has underperformed on

expectations the Fed is likely to begin raising rates next year

as the economy improves.

Economists forecast U.S. GDP grew 3 percent in the second

quarter after a sharp contraction of 2.9 percent in the first

quarter, and expect U.S. employers to have added 233,000 jobs in

July, according to Reuters polls.

The Dow Jones industrial average rose 30.44 points or

0.18 percent, to 16,991.01. The S&P 500 gained 1.95

points or 0.1 percent, to 1,980.29 and the Nasdaq Composite

added 2.67 points or 0.06 percent, to 4,452.23.

Russian markets tumbled for a third straight session after

the European Union reached an outline agreement on its first

economic sanctions on Russia since the downing of a Malaysian

airliner.

Moscow's dollar-denominated RTS index slumped 2.5

percent, the rouble-traded MICEX fell 1.9 percent and the

rouble dropped half a percent against both the dollar

and the euro.

"We have seen Germany stepping up rhetoric on tougher

sanctions on Russia," said Vasileios Gkionakis, Global Head of

FX Strategy for UniCredit (Milan: UCG.MI - news) in London. "Saying stability and peace

is the top priority rather than economic interests are strong

words."

An index of European shares lost 0.2 percent.

Brent crude oil slipped as forecasts for ample supplies in

the Atlantic basin and weak demand in Europe and Asia mitigated

fears of escalating tension in Ukraine and the Middle East.

September Brent fell 73 cents at $107.66 a barrel

while U.S. crude futures for September fell 40 cents to

$101.69, after ending last week 1 percent lower.

(Reporting by Angela Moon; Editing by Nick Zieminski)