US stocks fell today after European Central Bank president Mario Draghi brushed off pressure to act and said the bank would reassess the impact of its monetary policy stimulus early next year and take further action if necessary.
Energy sector stocks led the decline in the S&P 500 with a 1.5 percent drop that follows three days of gains in which they advanced 3.2 percent. The sector is down 8.7 percent year-to-date as crude oil prices tumbled.
The ECB met today under growing pressure to prevent the bloc’s economy from entering recession. The bank has already cut borrowing costs to record lows, given cheap loans to banks, and started buying debt to kick-start lending and bolster growth.
The government’s non-farm payrolls report for November is due Friday.
The Dow Jones industrial average fell 90.39 points, or 0.5 percent, to 17,822.23, the S&P 500 lost 10.03 points, or 0.48 percent, to 2,064.3 and the Nasdaq Composite dropped 13.55 points, or 0.28 percent, to 4,760.92.
Aeropostale shares fell 25.4 percent to $2.38 the day after the teen apparel retailer reported its eight straight quarterly loss and said it would close about 75 stores in the current quarter.
Shares of pet drug developer Kindred Biosciences fell 30 percent to $6.47 after it said it would stop developing its experimental atopic dermatitis drug for dogs due to «the rapid uptake and success» of a rival product. Dechra Pharmaceuticals recently launched its own treatment for the condition in Britain.
Declining issues outnumbered advancing ones on the NYSE by 2,161 to 803, for a 2.69-to-1 ratio; on the Nasdaq, 1,696 issues fell and 874 advanced for a 1.94-to-1 ratio favoring decliners.
The S&P 500 was posting 73 new 52-week highs and 6 new lows; the Nasdaq Composite was recording 100 new highs and 57 new lows.
Across the Atlantic, Euro zone shares fell today after the European Central Bank cut growth and inflation forecasts and said it would make a decision on further stimulus early next year.
That disappointed some traders who had bet that the meeting would bring details of additional measures, possibly a US-style government bond-buying scheme, seen as strongly supportive for the equity market.
The euro zone Euro STOXX 50 index was down 1.1 percent at 3,211.92 points. The pan-European FTSEurofirst 300, which had been hovering just below a seven-year high, was down 0.9 percent at 1,388.07 points.
The ECB slashed its forecasts for growth and inflation over the next two years, saying the outlook had deteriorated since September when its previous staff predictions were published.
Banks in deflation-struck Italy, Spain and Greece, which own sizeable holdings of sovereign bonds and depend on the health of their domestic economies for their profits, led the declines.
National Bank of Greece, Italy’s Monte Paschi and Spain’s Bankia fell between 3.6 percent and 4 percent.
Italy’s FTSE MIB index and Spain’s Ibex were down 1.5 percent and 1.2 percent, respectively.
While a perceived lack of detail caused investors to cash in recent stock market gains, many still believed the ECB would announce sovereign bond purchases next year. Draghi said technical preparations for further stimulus measures were being stepped up.
Meanwhile, Japanese stocks jumped to a near 7-1/2-year high today as a weak yen lifted key exporter shares while data showing US economic resilience and expectations of more monetary stimulus in Europe buoyed risk appetites.
Also lifting sentiment was a poll suggesting Prime Minister Shinzo Abe’s coalition will score a handsome win at the Dec. 14 general election, which could lead to a fresh mandate for his «Abenomics» plan to revive the economy.
The Nikkei benchmark, rising for a fifth straight day, ended 0.9 percent higher at 17,887.21, the highest closing level since July 2007. The broader Topix gained 0.8 percent to a 6-1/2-year peak at 1,440.60, and the JPX-Nikkei Index 400 added 0.7 percent to 13,078.27.
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