Updates with U.S. markets close, oil settlement

By Lawrence White and Chibuike Oguh

LONDON/NEW YORK, July 24 (Reuters) -Stocks sagged worldwide on Wednesday as earnings from Tesla and European luxury brands disappointed, while oil prices edged higher after trading near-six week lows due to concerns over weak global demand.

The U.S. dollar edged lower, with traders watching out for an inflation reading on Friday and a Federal Reserve meeting next week, while the yen climbed to a seven-week high ahead of a central bank meeting next week.

"I think the big story is clearly the earnings front and you've kind of seen reports all over the map, with Tesla probably the disappointing one," said Garrett Melson, portfolio strategist at Natixis Investment Managers Solutions in Boston.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS lost 1.7%,while Japan's Nikkei .N225 fell 1%.

On Wall Street, all three main indexes finished lower, led by losses in technology, consumer discretionary and communication services stocks.

Tesla's TSLA.O shares slumped 12.3%after it reported its lowest profit margin in five years amid waning demand for electric vehicles. Other so-called "Magnificent Seven" stocks including, Nvidia NVDA.O, Alphabet GOOGL.O, Amazon AMZN.O and Microsoft MSFT.O, closed down between 2.8% and 6.8%.

The Dow Jones Industrial Average .DJI fell 1.25% to 39,853.87, the S&P 500 .SPX lost 2.31% to 5,427.13 and the Nasdaq Composite .IXIC lost 3.64% to 17,342.41.

The pan-European STOXX 600 index .STOXX fell 0.61%to 512.30 points. The world's biggest luxury group LVMH LVMH.PA had reported slower sales growth as Chinese shoppers rein in their spending.

"It's the curse of high expectations, that's what the market was coming into earnings season with, especially for the tech companies that have been the darlings of the market", said James St. Aubin, chief investment officer at Sierra Mutual Funds in Santa Monica, California.

RATE CUT EXPECTATIONS

Subdued stock trading globally was symptomatic of markets looking for direction, with traders digesting a range of themes including the U.S. election, expectations of rate cuts and weak corporate earnings reports.

Oil prices settled higher thanksto falling U.S. crude inventories and growing supply risks from wildfires in Canada, but still sat near month-and-a-half lowsamid lacklustre demand.

Brent crude futures LCOc1 closed 0.9% higher at $81.71 a barrel. U.S. West Texas Intermediate crude CLc1 rose 0.8% to $77.59 per barrel.

U.S. GDP data on Thursday and personal consumption expenditure data - the Fed's favoured measure of inflation - on Friday could help investors calibrate their expectations of when interest rates might be cut.

Markets are pricing in 62 basis points of easing this year, with a cut in September priced in at 95%, the CME FedWatch tool showed. The benchmark U.S. 10-year Treasury US10YT=RR yield was lower for a second straight session. The yield rose 4.9 basis points to 4.288%.

"The rotation is in full force. Magnificent 7 earnings growth are decelerating, while un-magnificent 493 growth are accelerating," said Thomas Hayes, chairman at Great Hill Capital in New York, in a statement. "Fed cut will add fuel to this new trend for cyclicals, small caps and dividend stocks picking up the mantle," he said.

Gold prices slipped after paring early gains. Spot gold XAU= lost 0.45% to $2,398.45 an ounce, while U.S. gold futures GCcv1 settled 0.3% higher at $2,415.70.

The Japanese yen JPY= strengthened 1.06% against the greenback at 153.97 per dollar. In cryptocurrencies, bitcoin BTC= gained 0.01% at $65,848.00. Ethereum ETH= declined 3.18% at $3,372.50.

($1 = 155.3600 yen)

Reporting by Lawrence White in London and Chibuike Oguh in New York; Editing by Mark Potter and Marguerita Choy

 
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