Global stocks little changed as U.S. Republicans pass major tax overhaul

By Laila Kearney

NEW YORK (Reuters) - Major global stock markets were little changed on Wednesday as investors pared gains after record highs, while U.S. Treasury yields held near multi-month peaks, as a $1.5 trillion U.S. tax bill cleared both chambers of the Republican-led Congress.

The legislation, which would enact the biggest U.S. tax code overhaul in more than three decades, will head to President Donald Trump to be signed in to law.

The U.S. House of Representatives voted to pass the sweeping bill on Wednesday afternoon, hours after the Senate gave its approval.

The bill will slash the corporate income tax rate to 21 percent from 35 percent. Analysts say the cuts will boost business earnings and lead to higher dividends and stock buybacks for investors.

U.S. stocks rallied ahead of voting on the bill, introduced six weeks ago, but some investors have begun to sell.

"We rallied a lot on sort of a non-event and there is a little bit of head scratching about what's really new that we should be rallying on," said JJ Kinahan, chief market strategist at TD Ameritrade in Chicago.

The Dow Jones Industrial Average (DJI) rose 20.63 points, or 0.08 percent, to 24,775.38, the S&P 500 (SPX) gained 2.95 points, or 0.11 percent, to 2,684.42 and the Nasdaq Composite (IXIC) added 7.23 points, or 0.1 percent, to 6,971.08.

MSCI's gauge of stocks across the globe (MIWD00000PUS) shed 0.06 percent.

European stock markets fell (STOXX) 0.7 percent, with blue-chip indexes in Berlin (GDAXI), Paris (FCHI) and London (FTSE) 0.3 to 1.1 percent lower. The pan-European FTSEurofirst 300 index (FTEU3) also lost 0.7 percent.

The tax plan has boosted U.S. Treasury yields, which were at nine-month highs on optimism the plan will boost growth.

"U.S. yields have jumped sharply higher in the last two days as the prospect of higher inflation and growth prompted some positioning adjustments in anticipation that the measures ... could prompt conditions that might see rates have to rise faster than expected next year," said Michael Hewson, chief market analyst at CMC Markets in London.

Benchmark 10-year U.S. Treasury notes (US10YT=RR) were last down 7/32 in price to yield 2.4862 percent, from 2.463 percent late Tuesday.

The 30-year bond (US30YT=RR) last fell 30/32 in price to yield 2.8704 percent, from 2.823 percent.

The U.S. dollar slid against most currencies except the Japanese yen , on expectations the tax bill's upside impact on the greenback has been factored into the market.

The dollar index (DXY) fell 0.2 percent That led the euro to rise 0.39 percent to $1.1884. The dollar also fell against sterling and the Canadian and New Zealand dollars .

The weaker dollar pushed up gold prices for a fourth day. Spot gold added 0.4 percent to $1,266.54 an ounce. U.S. gold futures gained 0.47 percent to $1,270.20 an ounce.

Copper rose 1.4 percent to hit a two-month high on the dollar's downturn as investors remained optimistic about global growth prospects from the U.S. tax plan and China's steady economy.

Crude prices firmed modestly, supported by a larger-than-expected drop in U.S. inventories and a continued outage in the North Sea Forties pipeline system. [O/R]

U.S. crude futures rose 0.75 percent to $57.99 per barrel and Brent was last at $64.36, up 0.88 percent.