(Adds comment, details, updates prices)
* Spain seen requesting bailout, but uncertainty weighs
* Worries on 3rd-quarter earnings dog stock markets
* Gold holds near highest level of the year
* Aussie dollar slips as RBA cuts rates
By Wanfeng Zhou
NEW YORK, Oct 2 (Reuters) - The euro rose against the dollar on Tuesday on expectations that a request by Spain for a bailout is imminent, but major stock markets fell on uncertainty of when Madrid will make its request and growing uneasiness over third-quarter earnings.
European officials said on Monday that Spain is ready to make the request for a euro zone bailout as early as next weekend, although Germany has signaled that it should hold off.
A request for a bailout is viewed as positive for financial markets because it would trigger Spanish bond buying by the European Central Bank, which would lower the country's borrowing costs. It would also remove another layer of uncertainty in the region's three-year old debt crisis.
"Spain being rescued would be good for risk assets and ultimately global growth, but while the benefits are largely priced in, we're still getting conflicting signals that understandably have investors apprehensive," said Brian Barish, president of Cambiar Investors LLC in Denver, who helps oversee $7 billion.
"Until we get some kind of clarity, we should expect a lot of volatility and difficulty holding onto gains," Barish said.
Adding to the confusion about when aid could arrive, Spanish Prime Minister Mariano Rajoy said on Tuesday that a request for European aid was not imminent.
The MSCI global stock index slipped 0.1 percent to 332.84.
Wall Street stocks surrendered early gains and turned negative. The Dow Jones industrial average
dropped 68.46 points, or 0.51 percent, to 13,446.65. The Standard & Poor's 500 Index
dropped 3.21 points, or 0.22 percent, to 1,441.28. The Nasdaq Composite Index dropped 4.41 points, or 0.14 percent, to 3,109.12.
The Dow was pressured by stocks closely tied to the pace of growth, including heavy machinery maker Caterpillar Inc
and plane maker Boeing Co
. A major headwind for the global economy has been falling demand from Europe, which has been drifting toward recession.
Weaker-than-expected results from fertilizer producer Mosaic
added to worries about the third-quarter earnings season, which will kick off in earnest next week. Mosaic shares slid 4.7 percent and were the biggest percentage decliner on the S&P.
The FTSEurofirst-300 index of pan-European shares
fell 0.3 percent to end at 1,101.89 points, also weighed by doubts over third-quarter results and weakness in basic resources stocks.
"The real key to create confidence is positive earnings surprises, positive economic data surprises," said Philip Isherwood, European strategist at Absolute Strategy Research.
GRAPHICS Euro debt crisis Italy, Spain market overview
INVESTORS ON EDGE
The euro rose 0.3 percent to $1.2927
, notching a second straight day of gains against the greenback, while the dollar gained 0.2 percent against the yen to 78.10 yen
But uncertainty over the timing of Spain's request for aid kept investors on edge, with many selling the euro at higher levels. Another risk factor is rating agency Moody's soon-to-be announced review of Spain's rating, which could see it cut to junk status.
Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington, said worries about euro zone growth would keep the European Central Bank in easing mode, capping any euro upside.
Investors also awaited a number of central bank meetings later this week. The European Central Bank, the Bank of England and the Bank of Japan all meet this week, although none is expected to change benchmark interest rates.
Earlier on Tuesday, Australia's central bank cut its main rate by a quarter point to 3.25 percent. The Australian dollar
fell to a one-month low of $1.0291 and last traded down 0.9 percent at $1.0297.
U.S. Treasuries prices reversed early losses to edge higher as stock losses boosted the bid for safe-haven U.S. debt. The benchmark 10-year U.S. Treasury note was up 1/32, with the yield at 1.6146 percent
. Brent crude
slipped 31 cents to $111.88 a barrel as investors weighed a weaker outlook for fuel demand and sluggish economic growth. U.S. crude
fell 16 cents to $92.32. Gold prices
remained close to their highest level of the year. Gold is seen as a safe-haven asset. Spot gold was last at $1,772.99 an ounce.
(Additional reporting by Marc Jones in London and Gertrude Chavez-Dreyfuss and Ellen Freilich in New York; Editing by Leslie Adler)
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