European shares closed down on Thursday after policy meetings from major central banks in Europe failed to provide momentum, while the Dow and the Nasdaq Composite were down as investors waited for more information on Republicans’ tax overhaul. MSCI’s gauge of stocks across the globe shed 0.07 percent. Both the European Central Bank and Bank of England left interest rates unchanged, as expected. The ECB promised to hold rates low for an extended period and even maintained a pledge to provide more stimulus if needed.
The decisions come a day after a U.S. Federal Reserve meeting where the central bank announced a widely expected interest rate hike, but left its rate outlook for the coming years unchanged. Weakness in bank stocks contributed to a downbeat mood for equities in Europe, and the pan-European STOXX 600 index closed down 0.46 percent.
The Fed’s less hawkish statements supported MSCI’s broadest index of Asia-Pacific shares outside Japan, but its gains were pared to 0.17 percent. The Dow Jones Industrial Average fell 25.06 points, or 0.1 percent, to 24,560.37, the S&P 500 lost 5.24 points, or 0.20 percent, to 2,657.61 and the Nasdaq Composite dropped 9.45 points, or 0.14 percent, to 6,866.35.
Losses in healthcare stocks such as Johnson & Johnson offset gains in shares of technology and consumer discretionary companies. Walt Disney struck a deal to buy Twenty-First Century Fox’s assets for $52.4 billion in stock. Fox rose 4.73 percent and Disney 2.42 percent. After the U.S. Federal Communications Commission voted to repeal net neutrality rules, U.S. stocks moved lower as tech shares trimmed gains. “There’s just a little bit of a hold on the market,” said Quincy Krosby, chief market strategist at Prudential Financial in New Jersey. “The market is completely focused on the process of the tax reform. Certainly the deal with Disney and Fox should have helped push up the market, but the market is just waiting for the tax code.”
The euro fell 0.24 percent after the ECB revised its growth forecasts upward while sticking with its pledge to provide stimulus if needed. ECB President Mario Draghi “is, frustratingly, on the one hand saying that the progress we have achieved and expect to achieve is contingent on continued accommodation, which doesn’t speak to a central banker that’s ready to pull the rug away from QE,” said Richard Franulovich, a senior currency strategist at Westpac Banking Corporation in New York.
“But by the same token he is growing increasingly convinced that the recovery is broadening and more sustainable, and he’s got growing confidence that they can hit their inflation forecasts, so there is enough there to keep euro trapped in current ranges,” Franulovich added.
The dollar index, tracking the greenback against a basket of major currencies, rose 0.04 percent. The Japanese yen strengthened 0.28 percent at 112.23 per dollar.
U.S. Treasury yields rose after surprisingly strong data on retail sales in November supported solid economic growth in the fourth quarter. The 30-year Treasury last rose 11/32 in price to yield 2.7177 percent, from 2.735 percent late on Wednesday.
Benchmark 10-year notes last fell 1/32 in price to yield 2.3529 percent, from 2.349 percent late on Wednesday. In Greece, 10-year government bond yields fell, touching the lowest in almost a decade on Thursday. Earlier this month, Greece and its euro zone creditors reached a preliminary agreement on reforms Athens needs to roll out under its bailout program, while economic data has proven stronger than anticipated. U.S. crude rose 0.67 percent to $56.98 per barrel and Brent was last at $63.01, up 0.91 percent on the day.