The retreat in equity markets rekindled some safe-haven bids for U.S. Treasuries and other government debt, whose yields had risen from record lows linked to Britain's stunning vote to leave the European Union a month ago.
"The market is just tired," said Stephen Massocca, chief investment officer of Wedbush Equity Management in San Francisco. "It’s had a massive move in a straight line and so it is only natural to see some pullback here."
Oil prices declined after a rise in U.S. gasoline inventories pushed petroleum stockpiles to a record high, feeding uneasiness about a persisting global supply glut.
Dow and S&P stock indexes retreated from record highs as Intel (>> Intel Corporation) reported slowing revenue growth at its key data center, while European shares fell on weakness in airlines, led by a profit warning from Lufthansa (>> Deutsche Lufthansa AG).
The Dow Jones industrial average <.DJI> unofficially closed down 77.8 points, or 0.42 percent, at 18,517.23, the S&P 500 <.SPX> ended 7.85 points, or 0.36 percent, lower at 2,165.17 and the Nasdaq Composite <.IXIC> finished down 16.03 points, or 0.31 percent, to 5,073.90.
Europe's broad FTSEurofirst 300 index <.FTEU3> edged down 0.07 percent at 1,344.13.
The MSCI world equity index <.MIWD00000PUS>, which tracks shares in 45 nations, fell 0.39 points or 0.09 percent, to 412.43.
It faded from nine-month highs, cooled by signals from BOJ's Kuroda that its next shot of stimulus will not include hand-out 'helicopter money," effectively giving cash directly to the population, in a BBC radio interview.
The yen had earlier touched a six-week low against the dollar and the Nikkei <.N225> rose to a six-week high on reports of a 20-trillion-plus-yen Japanese stimulus package.
The Japanese currency, however, reversed course on Kuroda's remarks. It was last up 1 percent at 105.74 yen per dollar and 1.2 percent stronger versus the euro at 116.53 yen.
The euro held steady against the greenback in a choppy session after the European Central Bank opted to keep its record-low interest rates on hold, as expected.
ECB President Mario Draghi said the bank would take time to asses the impact of Britain's decision to leave the EU.
"It's a prudent path until they see more data," said Minh Trang, senior currency trader at Silicon Valley Bank in Santa Clara, California.
The euro was up fractionally at $1.1017
The U.S. 10-year Treasury yield
In the oil market, Brent crude
Gold prices rebounded from a three-week low after the ECB left rates alone. Spot prices
(Additional reporting by Lewis Krauskopf, Dion Rabouin in New York,; Marc Jones, Anirban Nag, John Geddie in London, Saikat Chatterjee in Hong Kong, Vijaykumar Vedala in Bengaluru; Editing by Nick Zieminski and Meredith Mazzilli)
By Richard Leong
