(Adds U.S. market open, byline, dateline; previous LONDON)
* Report says Trump sought Ukraine’s help in 2020 election
* Whistleblower alleges Trump sought foreign meddling
* Wall Street drops as political woes outweigh trade optimism
* Dollar eases after big jump Wednesday, euro rebounds
By Herbert Lash
NEW YORK, Sept 26 (Reuters) - U.S. stocks and government debt yields fell on Thursday after the release of a whistleblower complaint that accused President Donald Trump of pressing Ukraine to investigate one of his main political rivals in next year’s U.S. presidential election.
Yields on the benchmark U.S. 10-year Treasury note fell below 1.7% and stocks on Wall Street slid, leading a gauge of equity performance around the globe to pare gains and trade little changed.
European shares remained solidly in the black after the Chinese commerce ministry said the United States and China were making preparations to ensure “positive progress” is made during the next round of trade negotiations.
But traders were closely watching a congressional hearing at which the acting director of U.S. national intelligence, Joseph Maguire, testified about the whistleblower report after refusing for weeks to share the report with Congress.
Concerns about the whistleblower complaint triggered the rally in U.S. Treasury bonds, said Justin Lederer, Treasury analyst at Cantor Fitzgerald in New York.
The price of benchmark 10-year Treasury notes rose 10/32 in price to push their yield down to 1.6973%.
“The transcript of his call released yesterday did not seem to have anything specific that Trump said, ‘do this for that,’” Lederer said.
“The whistleblower complaint looks like there was more to it, but I don’t know. Overall, it’s just the idea that markets don’t like uncertainty,” he added.
MSCI’s gauge of stocks across the globe shed 0.01% while the pan-European STOXX 600 index rose 0.69%.
On Wall Street, The Dow Jones Industrial Average fell 47.27 points, or 0.18%, to 26,923.44. The S&P 500 lost 8.46 points, or 0.28%, to 2,976.41 and the Nasdaq Composite dropped 39.39 points, or 0.49%, to 8,037.99.
Facebook Inc slipped 1.4% as a person familiar with the matter told Reuters that the U.S. Justice Department will open an antitrust investigation of the social media company.
The dollar edged lower against the euro, giving up some of the sizeable gains from the previous session, as the common currency recovered a little after sinking to a 28-month low amid an increasingly bleak euro zone economic outlook.
Increased political tensions on both sides of the Atlantic - the unfolding effort by U.S. congressional Democrats to impeach Trump and ongoing uncertainty regarding Britain’s exit from the European Union - was likely to keep the greenback in demand, analysts said.
The dollar index fell 0.03%, with the euro up 0.04% to $1.0945. The Japanese yen strengthened 0.12% versus the greenback at 107.67 per dollar.
Crude prices fell for a third straight day as Saudi Arabia’s moves to restore output quickly after attacks on its oil installations promised yet more oil supply.
Brent crude futures were down 52 cents at $61.87 a barrel, while U.S. West Texas Intermediate (WTI) crude futures fell 72 cents to $55.77 a barrel.
Reporting by Herbert Lash, additional reporting by Gertrude Chavez-Dreyfuss in New York Editing by Nick Zieminski