By Chuck Mikolajczak
NEW YORK (Reuters) - Global equity markets slipped on Monday, pausing after a four-week rally ahead of policy announcements from central banks in the U.S. and Japan later in the week, while the dollar lost ground in the wake of soft U.S. housing data.
Investors had recently raised bets that Japan's already-massive stimulus would be further increased after China cut interest rates last week and the European Central Bank indicated it may add to its asset purchase program in December.
But comments Monday by a key economic adviser to Prime Minister Shinzo Abe, who said the Bank of Japan did not need to boost its monetary stimulus this week, cooled those expectations somewhat.
The U.S. Federal Reserve, meanwhile, which will issue a policy statement at the conclusion of a two-day meeting on Wednesday, is increasingly expected to hold off its first rate hike in nearly a decade until next year.
U.S. stocks dipped, with the PHLX housing index down 1 percent after the Commerce Department said new U.S. single-family home sales fell to near a one-year low in September after two straight months of gains.
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"Basically, what we are seeing here is a market that is subject to slight profit taking after strong gains registered last week," said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.
"We had new home sales which came down rather sharply and that is another reason to be somewhat cautious."
FOUR-WEEK RALLY
After a gain of more than 7 percent over the past four weeks, MSCI's all-country world index of the equity performance of 46 countries shed 0.05 percent, while the pan-regional FTSEurofirst 300 index in Europe fell 0.3 percent.
Shares in European markets were mostly lower, but Germany's DAX outperformed with a 0.2 percent gain after a business sentiment survey showed that morale had fallen by less than expected in October.
The Dow Jones industrial average fell 4.68 points, or 0.03 percent, to 17,642.02, the S&P 500 lost 3.09 points, or 0.15 percent, to 2,072.06 and the Nasdaq Composite added 8.59 points, or 0.17 percent, to 5,040.45.
About 170 companies in the S&P 500 are expected to report earnings this week, including Apple Inc on Tuesday.
Thomson Reuters data shows third-quarter earnings are expected to decrease 2.8 percent from a year ago, a slight improvement from the 3.9 percent decline expected a week earlier.
The dollar was off 0.3 percent to 96.86 against a basket of major currencies and fell to global session lows versus the yen in the wake of the housing data.
Crude oil prices fell, with U.S. crude off 1 percent to $44.15 and Brent down 0.8 percent to $47.61 as a global supply glut pushes fuel storage sites close to capacity, and with fewer speculators willing to bet on a rise in crude prices.
Prices on 10-year Treasuries were up 6/32 in price to yield 2.0635 percent.
(Editing by Bernadette Baum)