By Riva Gold

Global stocks slipped Thursday with U.S. markets poised for another session of modest declines.

The Stoxx Europe 600 was down 0.1% midday following a downbeat session in Asia. Futures pointed to a 12-point opening loss for the Dow Jones Industrial Average, which had flirted with the 20,000 milestone level on Wednesday.

Market activity was otherwise mostly muted ahead of the Christmas holidays, with volume trailing off and currencies and government bonds trading in narrow ranges.

"With just two sessions until the Christmas break, few traders want to open new positions," said Lee Wild, stockbroker at Interactive Investor.

Shares in Apple fell 0.6% in U.S. premarket trading, while Nokia's shares were down 4.8% in Europe after Apple and the Finnish telecommunications-equipment maker filed competing lawsuits over intellectual property.

In Europe, the basic resources sector was among the worst performers as falling base metal prices weighed on mining companies, with copper futures down 1.1% at $5,443 a ton.

Investors were also focused on the fate of Italy's Banca Monte dei Paschi di Siena SpA. The lender swung between small gains and losses in morning trading after falling 12% Wednesday as it struggled to sell fresh shares and avert a government bailout.

Monte dei Paschi needs to complete its rescue plan by the end of the year as part of a major balance-sheet cleanup agreed with the European Central Bank.

Earlier, shares in Asia mostly fell in thin holiday trading, with Hong Kong's Hang Seng Index down 0.8% and Japan's Nikkei Stock Average off 0.1%, pulled lower by financial stocks. Australian shares advanced 0.5%.

In currencies, the WSJ Dollar Index was little changed after settling at its second-highest level this year. The British pound fell 0.3% to $1.2334, while the euro rose 0.2% against the dollar to $1.0455 after falling around 4% so far this year.

"Unlike sterling, where we've at least had a fleeting sight of all-time lows, we're still a way off for the euro," said Simon Derrick, chief currency strategist at BNY Mellon. The difference in yield between European and U.S. government bonds is steep, putting the euro at risk of falling sharply next year, he said.

The 10-year German bund yield nudged up to 0.268% on Thursday, from 0.243% Wednesday, while the 10-year U.S. Treasury note was unchanged at 2.554%, a recovery of 1.177 percentage points from its July 8 low. Yieldsmove inversely to prices.

"The roller coaster we've witnessed in the interest rates market has been pretty epic--we hit generational lows [in yields] midyear, and just as quickly...have given back all of those gains and more," said Mark Heppenstall, chief investment officer at Penn Mutual Asset Management.

He expects yields to continue to rise next year, given the potential for fiscal stimulus in the U.S. to boost a strengthening economy.

"I don't think we're at that point yet, but if we move north of 3% on the 10 -year [Treasury] note, equity investors are going to stand up and take notice," he said.

Some are concerned that a fast appreciation of rates and tightening of monetary policy by the U.S. Federal Reserve could cool the economy and drag down a stock market that has climbed to record highs.

Giovanni Legorano and Ese Erheriene contributed to this article

Write to Riva Gold at riva.gold@wsj.com

(END) Dow Jones Newswires

December 22, 2016 07:58 ET (12:58 GMT)

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