* Italy relief does not last long for European stocks
* Chinese stocks' daily gain biggest in three years
* Investors eye U.S. earnings reports
* Sterling slips on Brexit nervousness
By Sinéad Carew
NEW YORK, Oct 22 (Reuters) - U.S. stocks were slightly lower in choppy trade on Monday as some investors showed earnings season nerves and the dollar strengthened, while long-dated U.S. Treasury prices edged higher.
The U.S. dollar rose as the British pound fell on news that Brexit negotiations with the European Union over Northern Ireland remained in flux and as the euro continued its slide on political uncertainty over Italy's budget. stocks boosted demand for low-risk debt, though gains were limited as investors remained on edge with rising inflation pressures and further potential interest rate hikes by the Federal Reserve. third-quarter earnings season and U.S. midterm elections also weighed on investor enthusiasm, along with the rising dollar, according to money managers.
"People are looking at the negatives and saying that it's a situation where there are more headwinds. At least until the midterms, it's going to be difficult to make any significant progress on the upside. The drift will be lower," said Alan Lancz, president, Alan B. Lancz & Associates Inc., an investment advisory firm in Toledo, Ohio.
The Dow Jones Industrial Average .DJI fell 65.74 points, or 0.26 percent, to 25,378.6, the S&P 500 .SPX lost 5.67 points, or 0.20 percent, to 2,762.11 and the Nasdaq Composite .IXIC added 42.44 points, or 0.57 percent, to 7,491.46.
U.S. EARNINGS
Investors looked ahead to the peak week for the U.S. earnings season, with Amazon (NASDAQ:AMZN), Alphabet (NASDAQ:GOOGL), Microsoft (NASDAQ:MSFT) and Caterpillar (NYSE:CAT) among the companies reporting. by a strong economy and deep corporate tax cuts, S&P 500 earnings per share are expected to grow 22 percent in the third quarter, according to I/B/E/S data from Refinitiv.
"There's some nervousness ahead of that," said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago.
The dollar index .DXY rose 0.3 percent, with the euro EUR= down 0.41 percent to $1.1466. USD/
Sterling GBP= , meanwhile, slipped 0.8 percent against the dollar. British Prime Minister Theresa May said the majority of Britain's deal to exit the EU has been agreed upon but repeated her opposition to an EU proposal regarding the Irish border, according to excerpts from her statement to Parliament. 10-year U.S. Treasury notes US10YT=RR last rose 3/32 in price to yield 3.1902 percent, from 3.202 percent late on Friday.
Brazilian stocks were the biggest gainers in Latin America, with emerging market sentiment boosted as China promised to provide stimulus to stabilize its economy and offset the impact of U.S. tariffs. trading was choppy, with U.S. crude CLcv1 futures settling at $69.17 per barrel, up 5 cents, or 0.07 percent. Brent LCOcv1 settled at $79.83 per barrel, up 5 cents, or 0.06 percent. O/R
Spot gold XAU= dropped 0.3 percent to $1,221.97 an ounce.
After rising as much as 0.7 percent earlier in the day, European stocks .STOXX ended lower as relief over Moody's decision to keep Italy's sovereign rating outlook stable was short-lived and the focus turned to Europe's response to Rome's budget plans. .EU stocks rose after China promised to stabilize its economy and offset the impact of U.S. tariffs. China, Shanghai blue chips .CSI300 gained 4.3 percent in their biggest one-day gain since November 2015, after Beijing promised stimulus support for stock markets in the world's second-largest economy. L3N1X21FI
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