* Stocks dip as investors await Fed meeting next week * Weak euro zone factory data pressures euro * After Verizon deal, Treasuries regain footing * Dollar falls to two-week low By Ellen Freilich NEW YORK, Sept 12 (Reuters) - U.S. stocks slipped, safe-haven Treasuries rallied and the dollar dipped on Thursday as investors turned defensive ahead of next week's Federal Reserve policy meeting. The price cuts in stocks appeared to put the S&P 500 index on track for its first loss after a seven-day winning streak, while data showing a drop in euro zone factory output stalled an eight-day rise in world equity markets. New U.S. claims for state unemployment benefits slipped 31,000 to a seasonally adjusted 292,000 in the latest week, the lowest level since 2006, but since the Labor Department said technical problems had kept two states from processing all the claims they received, markets dismissed the news. The dollar slipped from a seven-week high against the yen and traded little changed against the euro as U.S. bond yields declined and investors speculated the Fed would be cautious about reducing stimulus when it meets next week. U.S. Treasuries prices rose as investors recovered from a mammoth week of new corporate bond and government supply. The Treasury sold $13 billion in 30-year bonds on Thursday, the final sale of $65 billion in new U.S. government debt this week. Market moves were modest, however. "I would expect to see a holding pattern and possibly some risk aversion between now and the Fed's policy meeting," said Robert Tipp, chief investment strategist with Prudential Fixed Income, with about $400 billion in assets under management, in Newark, New Jersey. Investors are focused on the Fed's policy meeting on Tuesday and Wednesday, with expectations growing that the U.S. central bank will begin to reduce its monthly bond purchases, but by less than once thought. Uncertainty about how much the Fed would reduce stimulus has grown with weaker-than-expected U.S. data, including jobs growth in August, and consumer spending, home building, new home sales, durable goods orders and industrial production in July. A Reuters poll of economists on Monday found that most now see the Fed trimming its $85 billion monthly spending on bonds by about $10 billion, compared with estimates for a $15 billion reduction in a poll before the jobs report. Tipp said the market will pay close attention to the new forecasts for 2016 that Fed officials release in conjunction with their September 18 policy statement. "Markets have come a long way toward pricing in normalization of monetary policy but we still have risk, in large part hinging on Fed policymakers' expectations as to where the federal funds rate may be at the end of 2016," he said. "Coming out of the meeting, the key variable the markets will take their cue from is that forecast for 2016," Tipp said. As foreign exchange markets looked ahead to the U.S. central bank policy meeting, the dollar hovered near two-week lows against a basket of major currencies. Safe-haven U.S. Treasuries drew some buyers, allowing benchmark 10-year yields to ease to 2.90 percent from over 3 percent last week. The market is focused on the Fed, which will err on the side of caution, said Gordon Charlop, a managing director at Rosenblatt Securities in New York. "They will be very measured in their approach and won't do anything precipitous," he said. On Wall Street, the S&P 500 has risen 3.4 percent over the prior seven sessions as concerns about a Western military strike against Syria have faded and sentiment has been buoyed by stronger-than-expected economic data from China. On Thursday, however, the Dow Jones industrial average was down 2.99 points, or 0.02 percent, at 15,323.61. The Standard & Poor's 500 Index was down 3.30 points, or 0.20 percent, at 1,685.83. The Nasdaq Composite Index was down 1.68 points, or 0.05 percent, at 3,723.33. Europe's broad FTSE Eurofirst 300 index was down 0.02 percent. The MSCI world equity index was down 0.18 percent. SIGNS OF STRENGTH IN CREDIT MARKETS Treasuries debt prices rose a day after the completion of Verizon's record-breaking corporate bond deal. Verizon sold $49 billion worth of bonds, eclipsing the previous investment grade record of $17 billion by Apple in April, according to IFR, a Thomson Reuters service. "The Verizon deal showed that financing is still available at these (interest rate) levels and that's encouraging for mergers and acquisitions and leveraged buyouts," said Jason Brady, managing director and portfolio manager at Thornburg Investment Management in Santa Fe, New Mexico. If the Fed next week adjusts its bond-buying program only modestly, that, too, will favor riskier assets, Brady said. Until then, markets will tend to tread water. "Unless we get a significant new piece of information, we're going to be in this range-bound pattern, maybe with some bias for dollar weakness, as we wait for the Fed," said Vassili Serebriakov, FX strategist at BNP Paribas in New York. ASIAN RELIEF Reduced expectations of the degree of Fed tapering eased pressure on emerging market currencies, which had been driven up as the cheap U.S. money was pumped into high-yielding stocks and bonds, and are now falling as these trades reverse. Indonesia's central bank unveiled a surprise rate hike to help the rupiah recover from a 4-1/2-year low. Other Asian central banks were expected to wait for next week's Fed decision before taking any action. MSCI's broadest index of Asia-Pacific shares outside Japan shed 0.2 percent while the stronger yen and downbeat economic data helped push Japan's Nikkei stock average down 0.26 percent. Gold skidded to $1,326.54 an ounce, while Brent crude added about $1.17 to $112.67 as investors watched the step up in diplomatic efforts to place Syria's chemical weapons under international control.