Global shares and the euro slipped on Monday after the European Central Bank sought to squash speculation about potential market intervention to contain the euro zone debt crisis, dashing recent investor enthusiasm for risk.
German magazine Der Spiegel said over the weekend that the ECB was considering buying debt issued by euro zone countries if their interest rates rose too high, but a bank spokesman said it was misleading to report on decisions that still had not been taken.
Germany's central bank, the Bundesbank, also on Monday reiterated its opposition to bond purchases and a spokesman for the German finance ministry said it was not aware of any plans for the ECB to target bond spreads.
Global stock markets have had a recent strong run on hopes that a plan being drawn up by the ECB, which oversees price stability in the 17 countries that use the euro, could help the currency bloc control the two-year-old debt crisis.
Stocks on Wall Street edged lower, while the FTSEurofirst 300 index of top European shares retreated about 0.7 percent to 1102.49.
MSCI's all-country world stock index fell 0.3 percent, and its emerging market index about 0.2 percent.
European shares initially rose on the Der Spiegel report that the ECB is considering setting interest rate thresholds for the purchase of euro zone sovereign debt, a move that would discourage speculation.
"We are fishing in the fog at the moment so we need to see some more of the meat regarding the ECB's plans," said Heinz-Gerd Sonnenschein, equities strategist at Germany's Postbank.
The Dow Jones industrial average was down 39.87 points, or 0.30 percent, at 13,235.33. The Standard & Poor's 500 Index was down 5.50 points, or 0.39 percent, at 1,412.66. The Nasdaq Composite Index was down 14.48 points, or 0.47 percent, at 3,062.11.
The euro fell to $1.2328, down 0.1 percent on the day, and was off about 0.3 percent against the yen at 97.80.
The U.S. Dollar Index was down 0.01 percent at 82.538.
The euro's slide is expected to be limited, with the chance of the ECB taking action once the summer holiday season ends leaving investors wary of aggressively selling the currency.
"There are back and forth comments regarding ECB actions keeping the euro under pressure," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington. "All of this is taking place against the subdued late summer trading backdrop so I wouldn't read too much into any of this."
U.S. Treasury debt pared early losses to trade slightly higher, with yields touching session lows as weakness in stocks bolstered the safe-haven appeal of U.S. government debt.
Benchmark 10-year Treasury notes were trading 3/32 higher in price to yield 1.81 percent,
The benchmark 10-year U.S. Treasury note was up 1/32, with the yield at 1.8018 percent.
Oil prices also retreated slightly. Brent for October fell 16 cents at $113.55 a barrel.
U.S. light sweet crude oil fell 79 cents to $95.22 a barrel.