By Herbert Lash
NEW YORK (Reuters) - European shares rose on Thursday, a day after the Federal Reserve indicated it was in no rush to hike U.S. interest rates, but stocks slipped on Wall Street while crude oil retreated and the dollar rebounded, reversing the previous day's trajectory.
U.S. markets snapped back from strong rallies seen in stocks and crude oil after the Fed on Wednesday surprised investors by suggesting a less aggressive timeline for raising rates.
The dollar rebounded after posting steep losses the previous session, including its biggest one-day fall against the euro and sterling in six years.
Investors will seek signs of an improving U.S. economy after the Fed removed the word "patient" from its policy statement yet still underscored the need for patience, said Peter Kenny, chief market strategist at Clearpool Group in New York.
Fed Chair Janet Yellen basically told investors it's later rather than sooner, providing markets some buoyancy, he said.
"But it's going to take significantly more than that for the markets to move higher. Better economic data would be a very important component," Kenny said. "Yesterday's (stock) rally has all the appearances of being a one-day pop."
The Dow Jones industrial average <.DJI> fell 80.63 points, or 0.45 percent, to 17,995.56. The S&P 500 <.SPX> slid 7.19 points, or 0.34 percent, to 2,092.31 but the Nasdaq Composite <.IXIC> added 8.90 points, or 0.18 percent, to 4,991.73.
In Europe, the FTSEurofirst 300 <.FTEU3> index of top regional shares pared gains after climbing to a 7-1/2-year high. It was last up 0.14 percent at 1,592.48.
MSCI's all-country world index <.MIWD00000PUS>, a measure of equity performance in 46 countries, also pared gains to trade up 0.02 percent at 426.92.
Britain's benchmark share index <.FTSE> reached record highs as gold miners outperformed.
While the Fed downgraded its views on the economy and inflation, the U.S. economy is expected to grow faster than Europe's, making the greenback a good bet in the medium term.
With the European Central Bank just starting its bond-buying program and Greek debt negotiations still unresolved, parity with the euro is still achievable, said Richard Franulovich, senior currency strategist at Westpac in New York.
"The Fed is less supportive of the dollar, but the dollar's bull trend is built on more than just the Fed," he said.
The euro was down 1.99 percent at $1.0649 after trading above $1.10 > on Wednesday night, while the dollar index was up 0.52 percent <.DXY> at 99.058.
The dollar was up 0.56 percent at 120.76 yen >.
German bond yields fell to record lows on the Fed's rate hike assessment, while borrowing costs in Athens spiralled higher ahead of debt talks with Greece's creditors.
Yields on German 10-year Bunds, the euro zone benchmark, tracked earlier moves of U.S and Japanese government debt, falling as low as 0.165 percent before rising to 0.179 percent.
Benchmark 10-year U.S. Treasury yields edged lower after the Fed cut its inflation outlook for 2015 following its latest two-day policy meeting.
Ten-year Treasury notes > were last up 2/32 in price to yield 1.9425 percent.
Brent crude oil fell back towards $54 a barrel after Kuwait said the Organization of Petroleum Exporting Countries had no choice but to keep production steady, refocusing the market on global oversupply.
Brent for May delivery
(Additional reporting by Wayne Cole in Sydney; Editing by James Dalgleish)
