By Herbert Lash and Rodrigo Campos
NEW YORK (Reuters) - A gauge of global equity markets ended little changed on Tuesday, hamstrung by a late sell-off on Wall Street prompted by mounting uncertainty about more fiscal stimulus.
U.S. stocks retreated from near record highs after Senate Majority Leader Mitch McConnell, a Republican, said there had been no talks between the White House and House Democrats after they stalled last week.
Despite the sharp move in stocks, which had seen the S&P 500 brush against its record set in February, Treasury yields climbed ahead of record 10-year supply and gold and silver prices tumbled.
The dollar index got a late bid and ended higher for a fourth straight session. The U.S. currency fell as much as half a percent earlier on Tuesday but the late stimulus headlines turned the air out of the euro rally and gave a boost to the greenback.
The stronger dollar was no help for already battered precious metals. Spot gold prices fell near 6%, the largest one-day drop in over seven years and silver <XAG=> plunged over 15%, its largest daily drop in over a decade.
(Graphic: Daily percent change: spot gold, silver https://graphics.reuters.com/GLOBAL-MARKETS/PRECIOUS/nmopalayyva/chart.png)
Spot gold <XAU=> last dropped 5.6% to $1,914.47 an ounce.
U.S. producer prices increased by the most in more than 1-1/2 years in July, and the Labor Department's producer price index for final demand rose 0.6%, driven by a surge in portfolio management fees and rising costs for gasoline.
"We're sitting here close to the all-time highs in the S&P 500, so any potential negative headline like that can cause a hiccup," said Michael O'Rourke, chief market strategist at JonesTrading in Stamford, Connecticut.
Investors have been hoping Republicans and Democrats will resolve their differences and agree on another relief program to support about 30 million unemployed Americans.
MSCI's benchmark for global equity markets <.MIWD00000PUS> rose 0% to 564.09, off less than 3% from its record, while Europe's broad FTSEurofirst 300 index <.FTEU3> closed up 1.64% at 1,436.83.
On Wall Street, the Dow Jones Industrial Average <.DJI> fell 0.38%, the S&P 500 <.SPX> lost 0.80% and the Nasdaq Composite <.IXIC> dropped 1.69%.
Russian President Vladimir Putin's announcement that Russia had become the first country to grant regulatory approval to a COVID-19 vaccine after less than two months of human testing aided sentiment, some analysts said.
Benchmark 10-year notes <US10YT=RR> last fell 20/32 in price to yield 0.6382%, from 0.574% late on Monday.
The dollar strengthened after the late stimulus headlines.
The euro <EUR=> rose 0.03%, to $1.1739. The dollar index <=USD> rose 0.037%, and the Japanese yen weakened 0.51% versus the greenback at 106.50 per dollar.
U.S. crude <CLc1> recently fell 0.64% to $41.67 per barrel and Brent <LCOc1> was at $44.63, down 0.8% on the day.
(Reporting by Herbert Lash and Rodrigo Campos; additional reporting by Gertrude Chavez-Dreyfuss, Caroline Valetkevitch and Karen Brettell; Editing by Dan Grebler, Nick Zieminski and Tom Brown)