U.S. shares retreat, European shares end little-changed By Reuters

By Chris Prentice and Marc Jones

WASHINGTON/LONDON (Reuters) – European stocks pared losses and Wall Street reversed earlier gains on Thursday as investors weighed uncertainty over central bank tapering and economic recovery due to the coronavirus Delta variant against strong weekly jobless claims data.

Major U.S. indexes were lower, pulling back from earlier gains but still close to all-time highs.

The fell 133.74 points, or 0.38%, to 34,897.33, the lost 14.45 points, or 0.32%, to 4,499.62 and the dropped 4.28 points, or 0.03%, to 15,282.36 by 2:14 p.m. EDT (1814 GMT)

Federal Reserve Bank Governor Michelle Bowman added her voice Wednesday to the growing number of policymakers who say the weak August jobs report likely won’t throw off the central bank’s plan to trim its $120 billion in monthly bond purchases later this year.

Earlier in the day, U.S. data showed the number of Americans filing new claims for jobless benefits fell to the lowest level in nearly 18 months last week, offering more evidence that job growth was being hindered by labor shortages rather than cooling demand for workers.

After falling as much as 0.9% in morning trade, the pan-European index ended largely unchanged around 467.57 points. The index had shed 1.5% over the past two days on fears of a more-hawkish-than-expected ECB.

Euro zone bonds yields tumbled as the European Central Bank took its first tentative step in withdrawing COVID-era stimulus. Southern Europe led a fall in euro zone sovereign bond yields.

The euro rose 0.15% against the dollar, climbing for the first time in four sessions, while bond markets cheered by sending French 10-yields negative again. [GVD/EUR]

“We’re seeing some modest weakness mainly because the market is just in flux. There is no real clarity on when we will start to see the Fed and ECB start to pull back stimulus,” said Edward Moya, a senior market analyst with OANDA in New York.

Instead of hinting at any potential end date for its pandemic-era purchase programme, European Central Bank President Christine Lagarde instead channelled the spirit of former British Prime Minister Margaret Thatcher, saying: “The lady isn’t tapering.”

Germany’s 10-year yield, the benchmark for the bloc, fell. [GVD/EUR]

FRAGILE CHINA

MSCI’s benchmark for global equity markets fell 0.33% to 740.33. Emerging markets stocks fell 1.18%.

The UK’s dropped 1% with low-cost airline easyJet (LON:) tumbling over 10% as it tapped shareholders for 1.2 billion pounds ($1.7 billion). ()

MSCI’s broadest index of Asia-Pacific shares ended down 1%, which was its worst daily performance since Aug. 19, the last time markets decided they were worried about the U.S. Federal Reserve tapering its massive asset purchase…