(Updates prices with U.S. markets, changes comment, byline,dateline from previous LONDON)
* Bank shares hit by prospect of lower rates
* Focus shifting to Fed minutes, Jackson Hole symposium
* Demand concerns drag oil prices lower
By Rodrigo Campos
NEW YORK, Aug 20 (Reuters) - Traditional safe-havensincluding the Japanese yen and U.S. Treasuries were sought outon Tuesday even as there were signs that more economic stimuluswas on its way, as traders focused on concerns over a globaldeceleration.
The prospect of new elections in Italy after the announcedresignation of Prime Minister Giuseppe Conte added to globaluncertainties, but Italian markets have been jittery overinfighting within the coalition and Italian yields fell afterthe announcement.
The key for markets now is whether pledges for moreaccommodative policy from Germany to China are enough to assuageconcerns about the state of the global economy and end fears ofrecession.
The immediate focus now shifts to the minutes of the U.S.Federal Reserve's most recent meeting, due on Wednesday. Tradersare also awaiting the Fed's Jackson Hole seminar and a Group ofSeven summit this weekend for clues on what additional stepspolicymakers will boost economic growth.
"Market expectations for Jackson Hole and the centralbanking community in aggregate are extremely dovish," said BradBechtel, managing director at Jefferies in New York. "The U.S.market is pricing a tremendous amount of easing now, along withmany other markets around the world. The market is literallytrying to force the hand of the central banking community."
Weighed by the prospect of even lower interest rates, bankshares were among the largest decliners on Wall Streetand in Europe.
The Dow Jones Industrial Average fell 6.05 points, or0.02 percent, to 26,129.74, the S&P 500 lost 3.25 points,or 0.11 percent, to 2,920.4 and the Nasdaq Compositedropped 1.52 points, or 0.02 percent, to 8,001.29.
The pan-European STOXX 600 index lost 0.55 percent.
MSCI's gauge of stocks across the globe shed0.06 percent after two days of gains of more than 1%.
Emerging market stocks rose 0.26 percent boosted byovernight gains in South Korea.
The prospect of more central bank easing drove yields lower,Benchmark U.S. 10-year notes last rose 12/32 inprice to yield 1.5572 percent, from 1.598 percent late onMonday.
Financial markets went into a tailspin last week after U.S.2-year yields traded above those of 10-year paper, an inversionthat has presaged previous recessions and is widely watched bymarkets.
The dollar fell against major currencies, in line with thedrop in Treasury yields.
The dollar index fell 0.11 percent, with the euroup 0.14 percent to $1.1091.
The Japanese yen strengthened 0.27 percent versus thegreenback at 106.37 per dollar, while Sterling was lasttrading at $1.2156, up 0.26 percent on the day.
Oil prices fell on lingering concerns over future demand,though stimulus hopes helped cap losses.
U.S. crude fell 0.5 percent to $55.93 per barrel andBrent was last at $59.46, down 0.47 percent on the day.
Spot gold added 0.5 percent to $1,501.90 an ounce onbets on further rate cuts at the Fed and on growthconcerns.
(Reporting by Rodrigo Campos; Additional reporting by GertrudeChavez-Dreyfuss and Karen Brettell in NEW YORK, Ahmad Ghaddar inLONDONEditing by Nick Zieminski)