Stocks on Wall Street, which rose Wednesday following the Federal Reserve's announcement of reduced monetary stimulus, opened lower Thursday after some disappointing data on jobless claims.
In early trading the Standard & Poor's 500-stock index was off 0.2 percent, the Dow Jones industrial average fell 0.1 percent and the Nasdaq composite was 0.2 percent lower.
The Labor Department reported that the number of Americans filing new claims for unemployment benefits increased last week by 10,000 to a seasonally adjusted 379,000, the highest level in nearly nine months. Analysts had expected a decrease in claims.
Still, many investers breathed a sigh of relief that the Fed's decision to reduce its bond purchases was accompanied by a commitment to low interest rates for a while yet. The S.&P. and the Dow industrials both reached new highs on Wednesday, without adjustment for inflation
Stocks in Europe and a number of markets in Asia followed Wall Street's lead and recorded strong gains. The dollar is also solid, having recouped some recent losses, particularly against the euro, in the aftermath of the Fed's decision. However, jitters over the impact on emerging economies kept some markets in check.
After months of speculation that it was about to embark on so-called tapering, the Fed finally began to end its latest asset-purchase program. Policy makers decided to cut $5 billion each from the Fed's monthly purchases of United States Treasurys and mortgage backed securities. It also said it "will likely reduce the pace of asset purchases in further measured steps at future meetings."
However, mindful of the impact on markets, the Fed emphasized that its main interest rate would remain low until unemployment falls below the 6.5 percent threshold. Currently, unemployment in the United States stands at 7 percent.
"Equity markets took the 'taper' in its stride given the emphasis placed on dovish 'forward guidance,'" said Neil MacKinnon, global macro strategist at VTB Capital. "The Fed clearly wants to avoid any destabilization of the financial markets that could create adverse spill-overs for the real economy."
In Europe, the FTSE 100 index of leading British shares was up 1 percent while Germany's DAX rose 1.2 percent to 9,309. The CAC 40 in France was also 1.2 percent higher.
Earlier in Asia, the picture was a little bit more mixed, partly because of concerns of the impact of the change in American monetary policy.
"The resultant threat posed to Asian and emerging market finance costs ensured a mixed performance from Asian equities," said Jeremy Batstone-Carr, director of private client research at stockbrokers Charles Stanley.
Solid performances were recorded by Tokyo's Nikkei 225 index, the region's biggest market, which closed up 1.7 percent to 15,859.22. Sydney's S.&P. ASX 200 added 2.1 percent to 5,202.20.
However, China's benchmark Shanghai Composite Index shed 0.9 percent to 2,127.79 as a rise in money market interest rates pushed up trading costs and raised fears of an economic slowdown. And Hong Kong's Hang Seng declined 1.1 percent to 22,888.75 after analysts warned the Fed's change meant banks there might see an outflow of deposits. The territory's chief central banker warned of possible "market volatility" and said institutions have been warned to avoid excessive lending.
In the currency markets, the dollar strengthened in the wake of the Fed news but was trading fairly flat Thursday. The euro was steady at $1.3680, around a cent lower than where it was before the Fed decision, while the dollar was flat at 104 yen, having hit a six-year high of 104.36 yen on Wednesday.
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