Disappointment deflates US stocks
(08-03 08:04)
US stocks slid for a fourth straight day yesterday, as the European Central Bank took no action to address the euro zone sovereign debt crisis but suggested it may intervene on the markets to lower borrowing costs.
Both the ECB and the Bank of England maintained current monetary policies at meetings, a day after the US Federal Reserve also held the status quo, disappointing investors hoping for new economic stimulus, AFP reports.
The major indices started the day with sharp opening losses and showed few signs of recovery as the day progressed.
The Dow Jones Industrial Average was down 91.65 points (0.71 percent) at 12,879.41 points in closing trade. The tech-rich Nasdaq came the closest to making gains, hitting the break-even early in the day, before resuming its southward drop.
The Nasdaq lost 10.44 points (0.36 percent) to reach at 2,909.77. The S&P 500, a broad measure of the markets, dropped 10.12 points (0.74 percent) to 1,365.02.
ECB president Mario Draghi, in a post-meeting news conference, said the central bank “may undertake outright open market operations of a size adequate to reach its objective.''
Charles Schwab analysts said: “The European Central Bank talked tough but offered no immediate measures to try to solve the euro zone sovereign debt and economic crisis.’’
New US unemployment benefit claims rose by 8,000 last week, the Labor Department reported. Today, the markets await official numbers on July unemployment and jobs, after three straight months of weak job growth.
Shares of Knight Capital Group plunged 63.4 percent after the trading firm estimated a US$440 million loss due to its erroneous trades Wednesday, which it blamed on a software glitch. Alcoa led the Dow decliners, falling 3.3 percent.
Bond prices surged higher. The 10-year Treasury yield declined to 1.48 percent from 1.54 percent Wednesday, while the 30-year fell to 2.55 percent from 2.61 percent. Bond yields move inversely to prices.
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