* U.S. stocks lower in afternoon trading
* European shares close at lowest in four weeks
* Long-dated U.S. Treasury yields at months-high peaks (Updates to late trading on Wall Street and Europe close)
By Stephanie Kelly
NEW YORK, Oct 25 (Reuters) - U.S. and European stock markets fell on Wednesday amid some concerns over corporate earnings and U.S. tax reform plans, a day before the European Central Bank was set to decide its next monetary policy move.
The MSCI world equity index, which tracks shares in 47 countries, fell 0.35 percent.
Republicans have struggled to deliver on a number of President Trump's promises in Congress and financial investors worry tax cuts promised by the president to support growth will see a similar fate.
Traders cited a Wall Street Journal report suggesting, in contrast to comments by President Donald Trump, that Republicans were still considering limiting the deductibility of 401(k) plan retirement contributions, as one reason for the downturn in U.S. equities. The plans, for decades, have helped American workers save for retirement.
"The 401k issue is causing some confusion because it is directly contradicting the President and the market doesn't like confusion," said Michael Antonelli, managing director of institutional sales trading at Robert W. Baird in Milwaukee.
Disappointing earnings from AT&T sent shares in the United States' second largest wireless carrier down 3.6 percent, pulling down other telecom stocks Verizon and CenturyLink .
The Dow Jones Industrial Average fell 109.85 points, or 0.47 percent, to 23,331.91, the S&P 500 lost 12.77 points, or 0.50 percent, to 2,556.36 and the Nasdaq Composite dropped 38.76 points, or 0.59 percent, to 6,559.67.
European shares closed down, with a mixed batch of company results sparking profit-taking a day before the ECB's policy meeting. The central bank is expected to signal a reduction in its bond-buying scheme, gradually withdrawing post-crisis stimulus.
The pan-European STOXX 600 closed at its lowest level in nearly four weeks, down 0.6 percent. The FTSEurofirst 300 index lost 0.61 percent.
U.S. long-dated Treasury yields trimmed gains Wednesday afternoon, but remained at multi-month highs after a strong U.S. durable goods report.
The upcoming announcement of President Donald Trump's nominee to head the Federal Reserve has kept investors on edge over the direction monetary policy could take depending on whom he nominates.
Benchmark 10-year note yields last fell 10/32 in price to yield 2.4426 percent, from 2.406 percent late on Tuesday.
The 30-year bond yield, last lost 21/32 in price to yield 2.9559 percent, from 2.923 percent late on Tuesday.
The U.S. dollar dipped against of basket of key world currencies as the wait continued for President Trump to name the next head of the U.S. central bank.
The dollar index fell 0.06 percent, with the euro up 0.4 percent to $1.1806.
The Japanese yen strengthened 0.11 percent versus the greenback at 113.79 per dollar, while Sterling was last trading at $1.3248, up 0.87 percent on the day.
MSCI's broadest index of Asia-Pacific shares outside Japan closed 0.02 percent higher, while Japan's Nikkei lost 0.45 percent.
U.S. crude fell 0.67 percent to $52.12 per barrel and Brent was last at $58.27, down 0.1 percent on the day.
Spot gold added 0.1 percent to $1,276.81 an ounce.
Reporting by Stephanie Kelly; additional reporting by Gertrude Chavez-Dreyfuss and Richard Leong in New York, Sruthi Shankar in Bengaluru, Danilo Masoni and Helen Reid in Milan and London; Editing by Nick Zieminski and Daniel Bases