* Federal Reserve minutes turn Wall Street slightly positive
* Turkish lira 'not out of the woods yet' after central bank raises rates sharply
* Trump says trade talks with China need 'different structure'
* Oil falls on shock U.S. stock builds, OPEC supply worries
By Laila Kearney
NEW YORK, May 23 (Reuters) - Global stock markets pared losses and the dollar cut gains on Wednesday after the release of minutes from the U.S. Federal Reserve's May 1-2 meeting amid heightened concerns that setbacks to U.S.-China trade talks would undermine world economic growth.
U.S. President Donald Trump said trade discussions with China would need to be rerouted, saying the current track appeared "too hard to get done" and any agreement reached between the world's two largest economies needed "a different structure." remarks came a day after Trump said he was not pleased with U.S.-China talks, reversing a rally pegged to the White House's optimistic comments about the discussions over the weekend that led to a strong rally on Monday.
The sell-off was tempered, however, after the Fed released its meeting minutes, indicating interest rates would not be raised at a faster-than-expected pace. That tipped the Dow, S&P 500, Nasdaq and Russell 2000 indexes to close slightly positive.
"The stock market seems to have reacted positively to it," said Michael Arone, chief investment strategist at State Street Global Advisors in Boston. "Part of what's driving that is the market was bracing for the meeting minutes to be a bit more hawkish than they are."
The Dow Jones Industrial Average .DJI rose 52.4 points, or 0.21 percent, to 24,886.81, the S&P 500 .SPX gained 8.85 points, or 0.32 percent, to 2,733.29 and the Nasdaq Composite .IXIC added 47.50 points, or 0.64 percent, to 7,425.96.
Broad risk aversion hurt the dollar against the Japanese yen. The Japanese currency strengthened 0.73 percent versus the greenback at 110.10 per dollar.
But the greenback managed to rise to a six-month high against the euro on data indicating a slowdown in European business activity before paring gains after Wednesday's Fed minutes release. pan-European FTSEurofirst 300 index .FTEU3 lost 1.16 percent and MSCI's gauge of stocks across the globe .MIWD00000PUS shed 0.31 percent.
Another reason for the euro's woes is Italy, where an incoming coalition government comprised of the two anti-establishment parties - the League and 5-Star - looks likely to implement big-spending policies.
That could add to the country's big debt pile and cause Rome to clash with the European Union.
Investors were also eyeing Turkey, whose central bank raised interest rates by 300 basis points in an emergency move to put a floor under the plunging lira currency TRY=D3 . central bank, which had been scheduled to hold its next policy-setting meeting on June 7, said it had increased its top interest rate to 16.5 percent from 13.5 percent.
The lira has fallen about 20 percent so far this year to a series of record lows, but the currency reversed course after the central bank decision and was about 2 percent firmer on the day at 4.5717 to the dollar at 1637 GMT.
Still, the lira is "not out of the woods yet," said Win Thin, global head of emerging market currency strategy at Brown Brothers Harriman in New York.
"The relief is unlikely to last, especially if emerging markets continue to be under pressure,” Thin said. "The (Turkish) central bank will see how markets react and it will be important how they react when Europe opens" on Thursday.
Investors have sold off their lira holdings on concerns about loose monetary policy, particularly after recent comments by President Tayyip Erdogan, a self-described "enemy of interest rates." sell-off spurred a rally in U.S. Treasuries as concerns about the tumbling lira boosted demand for low-risk debt. other trading, oil fell after an unexpected build in U.S. crude and gasoline inventories despite strong demand, and as traders weighed the possibility of an increase in OPEC crude output to cover any shortfalls in supply from Iran and Venezuela. crude LCOc1 futures slipped 23 cents to settle at $79.80 a barrel, while U.S. crude CLc1 lost 36 cents to $71.84 a barrel. MSCI, Nikkei datastream chart
http://reut.rs/2sSBRiD Italy's pain, Germany's gain
https://reut.rs/2J2wdFo GRAPHIC-Global assets in 2018
http://tmsnrt.rs/2jvdmXl GRAPHIC-Emerging markets in 2018
http://tmsnrt.rs/2ihRugV GRAPHIC-World FX rates in 2018
http://tmsnrt.rs/2egbfVh GRAPHIC-MSCI All Country World Index Market Cap
http://tmsnrt.rs/2EmTD6j
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