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London • European shares shed earlier gains Thursday after the European Central Bank failed to cut a key interest rate as much as many in the markets had expected.

KEEPING SCORE: In Europe, Germany's DAX was 0.6 percent lower at 11,123 while the CAC-40 in France fell 0.4 percent at 4,888. The FTSE 100 index of leading British shares was down 0.2 percent at 6,408. Wall Street was poised for a steady opening with Dow futures and the broader S&P 500 futures up 0.2 percent.

EYES ON EUROPE: The European Central Bank announced a cut in one of its key interest rates in an attempt to stimulate lending and help a modest economic recovery. The bank reduced the rate on deposits from commercial banks from minus 0.2 percent to minus 0.3 percent. The negative rate is intended to push banks to lend excess cash by imposing a penalty for leaving it at the central bank's super-safe deposit facility. The ECB also said it will announce further measures at a news conference later by President Mario Draghi.

THE QUOTE: "This is less of a rate cut than markets and we had expected, probably showing that the hawks at the ECB had more leverage than expected," said Carsten Brzeski, an economist at ING.

EURO RECOVERS: The euro was up 0.6 percent at $1.0674 following the decision, a clear indication that traders expected a bigger rate cut.

FED ACTION: While the ECB is easing policy, the U.S. Federal Reserve looks set to raise interest rates later this month for the first time in nine years. In comments Wednesday, Fed Chair Janet Yellen gave an upbeat assessment of the economy's progress since the Fed's last meeting in October, describing it as in line with its expectations for the labor market and inflation. She also was careful to point out the need to review upcoming data, including the U.S. jobs report Friday.

ASIA'S DAY: Japan's Nikkei 225 ended little changed at 19,939.90 after recouping losses. South Korea's Kospi fell 0.8 percent to 1,994.07. Hong Kong's Hang Seng slipped 0.3 percent to 22,417.01 while the Shanghai Composite gained 1.4 percent to 3,584.82. Australia's S&P/ASX 200 shed 0.6 percent to 5,277.70. Stock benchmarks also fell in Taiwan, Thailand, Indonesia and the Philippines.

ENERGY: Benchmark U.S. crude was up 75 cents to $40.69 a barrel in electronic trading on the New York Mercantile Exchange while Brent crude, which is used to set prices for international oils, was up $1.02 to $43.51 a barrel in London.