* Oil gains after U.S. data shows spike in product demand
* Apple (O:AAPL), Boeing (N:BA) drag down Wall Street
* Markets await any hints of dovishness from Fed's statement
* U.S., German bonds steady to lower; gold retreats
(Updates market action, changes dateline, previous LONDON)
By Richard Leong
NEW YORK, Jan 27 (Reuters) - Recovering oil prices helped
global stock markets cut losses on Wednesday but investors
remained cautious as they awaited clues from the U.S. Federal
Reserve on the timing of its next interest rate increase.
Uncertainty ahead of the U.S. central bank's latest policy
statement pared some safe-haven bids for gold and U.S. and
German government debt.
"We seem to be at the mercy of the oil and commodity
markets," said Luke Batholomew, fixed income manager at Aberdeen
Asset Management in London.
U.S. oil futures CLc1 turned higher after trading down as
much as 4 percent, near $30 a barrel. U.S. data showed a jump in
weekly demand for products such as heating oil when a cold front
hit the country, although analysts said the rise in prices may
not last long.
Brent crude in London LCOc1 erased earlier losses,
rebounding above $32.
"Investors have their eyes on oil each day. It's a broader
proxy for concerns about the global economy," said Michael
Arone, chief investment strategist at State Street Global
Advisors' U.S. Intermediary Business in Boston.
Weakening business activity in the United States, China and
the rest of world has been evident with the spate of mostly
weaker-than-forecast data since the beginning of the year. But
it is unclear whether the pullback in U.S. growth is severe
enough to derail U.S. policymakers' plan to raise interest rates
further in 2016.
The Federal Open Market Committee, the Fed's policy-setting
group, is scheduled to release a policy statement at 2 p.m.
ET(1900 GMT) after a two-day meeting. FED/DIARY
Analysts widely expected the FOMC to leave policy rates
unchanged at 0.25-0.50 percent and to perhaps soften its tone on
its earlier outlook for four quarter-point rate hikes this year.
Apple and Boeing's disappointing forecasts dragged down U.S.
stock indexes, but they recovered from the day's lows.
The Dow Jones industrial average .DJI was down 74.37
points, or 0.46 percent, at 16,092.86, the S&P 500 .SPX was
down 5.64 points, or 0.3 percent, at 1,897.99 and the Nasdaq
Composite .IXIC fell 43.58 points, or 0.95 percent, at
4,524.09.
The pan-European FTSEurofirst 300 index .FTEU3 edged down
0.1 percent.
Earlier on Wednesday, Chinese shares .CSI300 ended
stronger, and Tokyo's Nikkei <.N225) finished 2.7 percent
higher.
The dollar index, which gauges the greenback against six
currencies, was down 0.3 percent at 99.112.
In the bond market, benchmark 10-year Treasury yield
US10YT=RR rose 3 basis points to 2.024 percent.
Its German counterpart DE10YT=RR edged up about 1 basis point
to 0.415 percent.
Traditional safe-haven gold retreated from a 12-week high
set Tuesday, last down $4.01 or 0.36 percent, at $1,116.16 an
ounce XAU= . GOL/