Global Markets: Stocks dip on tax plan, ahead of Apple results; sterling drops

By Chuck Mikolajczak

NEW YORK (Reuters) - World stock markets declined on Thursday, with Wall Street and the U.S. dollar falling in the wake of details of a Republican tax plan and ahead of results from Apple, while sterling dropped after a policy announcement from the Bank of England.

U.S. stocks edged lower after the release of the Republican tax plan, which called for a swath of changes to the U.S. tax code, including slashing the corporate tax rate and reducing the number of tax brackets for individuals.

"Basically, it is not revenue neutral on the face of it and it would require some awfully optimistic assumptions in terms of dynamic scoring, meaning growth will be so huge the tax cut will pay for itself," said Ed Yardeni, president and chief investment strategist at Yardeni Research Inc in New York.

"Getting it through Congress could be challenging."

Apple, the largest U.S. company by market capitalization, will report results after the market closes.

The Dow Jones Industrial Average fell 1.32 points, or 0.01 percent, to 23,433.69, the S&P 500 lost 4.74 points, or 0.18 percent, to 2,574.62 and the Nasdaq Composite dropped 13.24 points, or 0.2 percent, to 6,703.29.

Housing shares stumbled 0.95 percent on the tax plan, which would maintain the deductions for mortgage interest on existing loans and newly purchased homes for up to $500,000.

The dollar fell to its lowest in a week against a basket of major currencies after the tax details were released.

The dollar index fell 0.24 percent, with the euro up 0.47 percent to $1.1672.

Sterling skidded after the Bank of England raised interest rates for the first time in more than 10 years but said it expected only "very gradual" further increases over the next three years.

Sterling dropped 1.1 percent and was on track for its biggest one-day drop since June, and Britain's main FTSE 100 stock index climbed 0.7 percent.

The rest of Europe retreated from two-year highs hit in the prior session. The pan-European FTSEurofirst 300 index lost 0.45 percent and MSCI's gauge of stocks across the globe shed 0.05 percent.

Attention will stay on the Fed after it held rates steady on Wednesday and cemented expectations for a third U.S. rate hike of the year in December, with Donald Trump's expected nomination of Jerome Powell on Thursday to replace Janet Yellen at the Fed's helm.

Powell is a current policymaker and is seen by Fed followers as a Yellen-style pragmatist and less likely to sharply raise interest rates than some of the other candidates to have been in the running.

Benchmark 10-year U.S. notes last rose 7/32 in price to yield 2.3505 percent, from 2.376 percent late on Wednesday.

(Reporting by Chuck Mikolajczak; Editing by Bernadette Baum)