* U.S. stocks fall on disappointing earnings; MSCI global index slips
* Dollar falls as U.S. durable goods data weaker than expected
* Cost of insuring Russian debt rises after rating cut (Updates with crude settlements)
By Caroline Valetkevitch
NEW YORK, Jan 27 (Reuters) - Global stock indexes fell on Tuesday following disappointing U.S. corporate earnings results and an unexpected decline in U.S. durable goods orders, while the dollar also retreated.
All three major U.S. stock indexes were lower but well off the lows of the session in afternoon trading.
Leading the way lower were shares of Microsoft, down 8.7 percent, and Caterpillar, down 7.3 percent. Their results were among the latest disappointments in the current U.S. earnings period, with the recent drop in oil prices, overseas economic weakness and dollar strength taking a toll.
"People may not be aware of... what the ripple effects of oil's weakness will be. There are a lot of companies that are going to be adversely impacted," said Jim O'Donnell, chief investment officer at Forward in San Francisco.
The dollar retreated following release of the U.S. durable goods data and on speculation the Federal Reserve might hold off on raising interest rates longer than expected. The U.S. central bank is due to release a policy statement on Wednesday.
U.S. Commerce Department data showed non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, unexpectedly fell last month. A separate report, however, showed U.S. consumer confidence rose to its highest since 2007 in January.
On Wall Street, the Dow Jones industrial average was down 258.66 points, or 1.46 percent, to 17,420.04, the S&P 500 lost 23.46 points, or 1.14 percent, to 2,033.63 and the Nasdaq Composite dropped 73.29 points, or 1.54 percent, to 4,698.47.
A snowstorm in the U.S. Northeast kept many investment banks and fund managers on skeleton staff, though the main exchanges were open.
MSCI's global share index was down 0.2 percent while an index of European shares closed down 0.8 percent.
The euro rose 1.2 percent to $1.1370, off the session high $1.14230. That put it further away from Monday's 11-year low of $1.1098 hit after voters in Greece elected an anti-bailout government.
Investors widely expect the Fed to acknowledge the uncertain global outlook and stick to its promise to be patient on tightening monetary policy. However its timetable remains for higher rates by mid-year, a trajectory that presages further broad-based gains for the dollar.
Russia was also in the spotlight after a cut to its credit rating dealt a further blow to the rouble, though by Tuesday the currency had regained some ground against the dollar.
The cost of insuring exposure to Russia's debt rose after Standard & Poor's cut Russia's sovereign credit rating to "junk" late on Monday, citing weakened economic growth prospects and Western sanctions over Ukraine.
U.S. Treasury debt prices rose, with 30-year yields touching record lows after the U.S. economic data. Thirty-year bonds were last up 1-7/32 in price to yield 2.3356 percent. Earlier the yield hit a record low of 2.328 percent.
In commodity markets, oil rose as a weaker dollar propped up commodities priced in the currency. U.S. crude oil futures settled at $46.23 a barrel, up $1.08, while Brent settled at $49.60, up $1.44. (Additional reporting by Ryan Vlastelica in New York; and Lionel Laurent, John Geddie, Francesco Canepa, Jemima Kelly and Karin Strohecker; Editing by Janet Lawrence, Dan Grebler and James Dalgleish)