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GLOBAL MARKETS-Dollar falls on durables data; stocks steady

* World stock indexes edge higher

* U.S (Other OTC: UBGXF - news) . durable goods orders surge, business spending weak

* U.S. oil ends lower after hitting $50 a barrel (Adds U.S. oil closing level, updates prices)

By Caroline Valetkevitch and Saqib Iqbal Ahmed

NEW YORK, May 26 (Reuters) - The U.S. dollar slipped on Thursday after U.S. durable goods orders data showed weakness in business spending plans, while world stock indexes edged higher, extending recent gains.

U.S. oil prices closed slightly lower after earlier topping $50 a barrel for the first time in about seven months.

Orders for long-lasting U.S. manufactured goods surged in April on strong demand for transportation equipment and a range of other products, but U.S. business spending intentions weakened in April for a third straight month amid soft demand for machinery.

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"The market is not really seeing any signs here of an improvement in business spending," said Thierry Albert Wizman, global interest rates and currencies strategist at Macquarie Ltd in New York.

The U.S. dollar index, which measures the greenback against a basket of six major currencies, was down 0.2 percent, but pared some losses on comments from Federal Reserve Governor Jerome Powell.

Speaking on Thursday, Powell said a rate hike may come "fairly soon" if data confirm the economy is continuing to grow and labor markets are still tightening, remarks that may help tee up higher rates as soon as in mid-June.

Investors are looking ahead to a speech by Federal Reserve Chair Janet Yellen on Friday for more clues on the U.S. interest rate outlook.

Investor (LSE: 0NC5.L - news) expectations for higher rates have grown since last week's minutes from the central bank's April meeting signaled a June increase was on the table. Comments from policymakers and upbeat U.S. economic data in recent days have supported those views.

Defensive sectors including utilities and telecommunications gave the biggest boost to the S&P 500.

The Dow Jones industrial average was down 17.16 points, or 0.1 percent, to 17,834.35, the S&P 500 gained 1.19 points, or 0.06 percent, to 2,091.73 and the Nasdaq Composite added 9.51 points, or 0.19 percent, to 4,904.40.

MSCI (NYSE: MSCI - news) 's all-country world stock index rose 0.3 percent, while the FTSEurofirst 300 closed up 0.2 percent.

Brent hit its highest level since early November, rising above $50, but was last down 17 cents at $49.57. U.S. crude futures fell 8 cents to settle at $49.48 after rising to $50.21 earlier, the highest level since mid-October.

"The global surplus still exists and there is still a possibility that oil prices could retrace further," said Dominick Chirichella, senior partner at the Energy Management Institute in New York.

Yields on U.S. medium- to long-dated Treasuries fell to session lows following solid demand at a $28 billion of seven-year note supply, the final leg of this week's $88 billion in coupon-bearing government debt issuance.

The benchmark 10-year Treasury yield was down 4 basis points at 1.832 percent, while five-year yield was 5 basis points lower at 1.352 percent.

In the precious metals market, gold prices was on pace for its seventh straight session of decines, its longest stretch of losses since early November. Spot gold was down 0.3 percent to $1,220.06 an ounce. (Additional reporting by Barani Krishnan and Sam Forgione in New York and Ankur Banerjee in Bengaluru; Editing by Bernadette Baum and Nick Zieminski)