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GLOBAL MARKETS-World stocks lower; U.S. Treasury yield gap shrinks

Published 15/12/2017, 08:15 am
© Reuters.  GLOBAL MARKETS-World stocks lower; U.S. Treasury yield gap shrinks
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* Wall St ends down; investors worry about tax bill passage

* Upbeat retail sales data flatten U.S. yield curve

* Dollar gives up gains on doubts about passage of tax bill

* Oil prices up slightly on pipeline outage support (Updates to U.S. trading close, adds commentary)

By Stephanie Kelly

NEW YORK, Dec 14 (Reuters) - World shares were lower on Thursday after concern from investors over potential obstacles to Republican's tax overhaul and a slate of policy meetings from major central banks in Europe.

MSCI's gauge of stocks across the globe .MIWD00000PUS shed 0.20 percent.

The Dow Jones Industrial Average .DJI fell 75.94 points, or 0.31 percent, to 24,509.49, the S&P 500 .SPX lost 10.79 points, or 0.41 percent, to 2,652.06 and the Nasdaq Composite .IXIC dropped 19.27 points, or 0.28 percent, to 6,856.53.

While U.S. Congressional Republicans reached a deal on final tax legislation on Wednesday, some policymakers said they were unhappy with the legislation's child tax credit approach. investors worry that stocks could tumble if the bill, which includes slashing corporate taxes, fails.

"The fear they can't get corporate tax cuts across the finish line might be causing the market to turn down, despite the strong retail sales and other good economic data," said Kim Forrest, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh.

Earlier in the day, stocks moved lower after the U.S. Federal Communications Commission voted to repeal net neutrality rules. in bank stocks contributed to a downbeat mood for equities in Europe, and the pan-European STOXX 600 .STOXX index closed down 0.46 percent.

On Thursday, 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. 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. Fed's less hawkish statements supported MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS , but its gains were pared to 0.18 percent.

U.S. TREASURY YIELD GAP SHRINKS

The gap between U.S. shorter-dated and longer-dated Treasury yields shrank as surprisingly strong data on retail sales in November supported the view the Federal Reserve would raise interest rates further to keep the economy from overheating. yield spread between five-year and 30-year Treasuries US5US30=TWEB was last at 57.0 basis points.

"The yield curve will flatten in the long term," said Matt Freund, head of fixed income strategies at Calamos Investments in Chicago. "The long end of the curve will be well-behaved with the Fed being deliberate in raising short-term rates."

Benchmark 10-year notes US10YT=RR last fell 1/32 in price to yield 2.3511 percent, from 2.349 percent late on Wednesday.

The 30-year Treasury US30YT=RR last rose 17/32 in price to yield 2.7094 percent, from 2.735 percent late on Wednesday

The euro EUR= fell 0.34 percent after the ECB revised its growth forecasts upward while sticking with its pledge to provide stimulus if needed. dollar index .DXY , tracking the greenback against a basket of major currencies, rose 0.12 percent, paring earlier gains on tax legislation concern.

The Japanese yen strengthened 0.25 percent at 112.28 per dollar.

In Greece, 10-year government bond yields GR10YT=RR fell, touching the lowest in almost a decade on Thursday. 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. crude CLcv1 rose 0.94 percent to $57.13 per barrel and Brent LCOcv1 was last at $63.40, up 1.54 percent on the day. Global assets in 2017

http://reut.rs/1WAiOSC Global currencies vs. dollar

http://tmsnrt.rs/2egbfVh Global bonds dashboard

http://tmsnrt.rs/2fPTds0 Emerging markets in 2017

http://tmsnrt.rs/2ihRugV

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