* Dollar hits 5-week low as Fed move seen as dovish
* Europe stocks gain as Dutch election soothes EU breakup
* Wall Street edges down after big post-Fed gains
* Sterling jumps after BoE rate-setter votes for hike
(Updates with afternoon trading)
By Lewis Krauskopf
NEW YORK, March 16 A key index of world stocks
climbed to record highs while the U.S. dollar sank to a
five-week low on Thursday as investors digested the recent U.S.
interest rate increase and indications there would be no pick-up
in the pace of monetary tightening.
European stock markets gained after the Dutch election
victory by Prime Minister Mark Rutte which fought off a
challenge by anti-immigration, anti-European Union rival Geert
On Wall Street, major U.S. equity indexes were modestly
lower after gaining sharply on Wednesday in the wake of the U.S.
Federal Reserve's rate decision.
Fed Chair Janet Yellen pointed to growing faith in the
economy's trajectory as the U.S. central bank raised rates for
the second time in three months.
"Certainly, the Fed was dovish in their approach," said
Bruce Bittles, chief investment strategist at Robert W. Baird in
Sarasota, Florida. "The fact that the Fed raised rates, but not
aggressively, but yet indicated that she had confidence in the
economy certainly was a big help."
MSCI's all-country world stock index gained
0.7 percent, and hit an all-time high.
The Dow Jones Industrial Average fell 10.99 points,
or 0.05 percent, to 20,939.11, the S&P 500 lost 3.53
points, or 0.15 percent, to 2,381.73 and the Nasdaq Composite
dropped 3.11 points, or 0.05 percent, to 5,896.94.
Healthcare shares led U.S. declines after proposals
in President Donald Trump's budget signaled higher regulatory
costs for the sector and a cut in federal funding for medical
research. Optimism over Trump's proposed economic agenda,
including tax cuts, has driven U.S. equities to record highs.
“Most of the news that you’re hearing out of Washington
suggests that it’s going to be just a longer slog to get things
done," said Bruce McCain, chief investment strategist at Key
Private Bank in Cleveland.
“Given that a lot of this rally has been predicated on the
anticipation of some fairly dramatic changes in Washington, one
would imagine that some investors have to be losing some faith,”
The pan-European STOXX 600 index rose 0.7 percent
and touched its highest level since December 2015, helped by the
Fed's dovish tone and the Dutch election results.
Amsterdam's AEX index rose 0.6 percent and hit its
highest in more than nine years.
"Some of that fear around Brexit, Trump, and then Wilders
and (France's) Le Pen, may now be seeping out of the markets -
you see some of that fear dissipating," said Arne Petimezas,
analyst at AFS Group in Amsterdam, referring to far-right French
presidential Marine Le Pen.
The dollar fell 0.2 percent against a basket of key
currencies, adding to Wednesday's steep slide after the
Fed's decision. It touched a five-week low.
Sterling jumped after the Bank of England kept interest
rates on hold but gave a handful of hints in voting results and
its minutes that it might raise them soon.
U.S. Treasury yields rose from more than one-week lows on
the view that they had fallen too sharply in the prior session
after the Fed maintained its outlook for only a gradual pace of
interest rate increases this year.
Prices on benchmark 10-year Treasuries US10YT-RR fell 8/32
to yield 2.531 percent, up from 2.504 percent late on Wednesday.
Oil prices were little changed in choppy trading as support
from a weaker dollar was offset by a stubbornly high level of
Brent crude edged up 0.1 percent at $51.85 a barrel.
U.S. light crude was down 0.1 percent at $48.83 a barrel.
(Additional reporting by Jemima Kelly in London; Editing by
Bernadette Baum and Nick Zieminski)