* U.S., European shares dip with payroll report awaited
* Euro, pound, claw back versus dollar; ECB, BOE hold rates
* Copper tumbles in biggest one-day drop since November
By Ryan Vlastelica
NEW YORK, Jan 9 Stock markets around the world
fell on Thursday, with investors cautious ahead of the December
U.S. payrolls report on Friday, which overshadowed strong data
on the U.S. labor market and European sentiment.
While recent data has indicated improving conditions, this
is the first payrolls report since the Federal Reserve announced
a slowing of its stimulus program, putting more pressure on the
data to justify the market's steep recent gains.
U.S. initial jobless claims fell more than expected in the
latest week, while a euro zone sentiment index jumped to a
29-month high in December.
"The numbers continue to be good and that should eventually
push the market higher, but there's a lot of exhaustion after
the strong push we had in December," said Bruce McCain, chief
investment strategist at Key Private Bank. "We're waiting for
the payroll report to assess where we go from here."
The European Central Bank and the Bank of England both kept
their respective 0.25 percent and 0.5 percent interest rates
unchanged on Thursday, but markets were on alert for any signs
of future ECB monetary stimulus moves or shifts in the economic
ECB chief Mario Draghi has been at pains to stress in recent
months that the bank is prepared to ease its record low interest
rates below 0.25 percent and test out other, more
unconventional, policy options if necessary.
The Dow Jones industrial average was down 66.66
points, or 0.40 percent, at 16,396.08. The Standard & Poor's 500
Index was down 5.32 points, or 0.29 percent, at 1,832.17.
The Nasdaq Composite Index was down 18.89 points, or
0.45 percent, at 4,146.73.
U.S. investors were also looking ahead to the upcoming
earnings season, with Alcoa Inc reporting after the
market closes on Thursday.
"This is the 'show me' year in terms of earnings," said Bill
O'Neill, head of wealth management research at UBS. "You have to
see an improvement."
European shares fell 0.4 percent while the MSCI
International ACWI Price Index was down 0.5
percent, pressured by Asia. Tokyo shares fell 1.5
A sharper-than-expected slowdown in China's annual consumer
inflation in December also caused some jitters in Asia, with
shares in China down 0.8 percent.
The pound was at $1.6469 while the euro was up 0.2
percent at $1.3593. The U.S. dollar index was flat
against a basket of currencies.
Among commodities, gold was 0.1 percent higher
following a two-day decline.
U.S. crude futures rose 0.1 percent to $92.40 a
barrel, rebounding from a five-week low hit overnight after data
showed a large build-up of stockpiles at the U.S. benchmark
Brent crude gained 0.5 percent to $107.62 per
barrel, though copper prices, highly sensitive to the
economic outlook for top consumer China, tumbled 1.5 percent in
its biggest one-day drop since November.
"I'm a bear on copper prices - I think $7,000 is a more
sustainable level," said Helen Lau, a senior commodities analyst
with UOB Kay Hian.
"The dollar will continue to strengthen because of U.S
tapering (stimulus withdrawal), and China's economic growth is