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U.S. stocks extend losses amid ECB move

Xinhua, December 4, 2015 Adjust font size:

U.S. stocks reversed early gains to trade mildly lower around midday Thursday, as Wall Street assessed the European Central Bank's (ECB) decision to cut deposit interest rate by 10 basis points.

By noon, the Dow Jones Industrial Average fell 44.93 points, or 0.25 percent, to 17,684.75. The S&P 500 dipped 7.35 points, or 0.35 percent, to 2,072.16. The Nasdaq Composite Index was down 13.98 points, or 0.27 percent, to 5,109.25.

The ECB on Thursday decided to lower the interest rate of deposit facility by 10 basis points to minus 0.3 percent, with effect from Dec. 9, 2015.

The interest rate on the main refinancing operations and the interest rate on the marginal lending facility will remain unchanged at 0.05 percent and 0.3 percent respectively.

The ECB also decided to extend the asset purchase program (APP), which was intended to last at least until September 2016.

"The monthly purchases of 60 billion euros (65 billion U.S. dollars) under the APP are now intended to run until the end of March 2017," said Mario Draghi, president of the ECB at a press conference following the governing council meeting.

However, analysts had anticipated a deeper cut to interest rates and had expected an increase in its asset purchase program.

On Wednesday, U.S. Federal Reserve Chair Janet Yellen expressed her confidence in the U.S. economy, saying that she was "looking forward" to an interest rate hike.

Investors believed that Yellen's speech could be seen as a sign that she is ready to raise interest rates later this month.

On the economic front, in the week ending Nov. 28, the advance figure for seasonally adjusted initial jobless claims was 269,000, an increase of 9,000 from the previous week's unrevised level of 260,000, said the U.S. Labor Department Thursday.

The four-week moving average was 269,250, a decrease of 1,750 from the previous week's unrevised average of 271,000.

The U.S. non-manufacturing index registered 55.9 percent in November, 3.2 percentage points lower than the October reading of 59.1 percent, the Institute Supply Management (ISM) reported Thursday. Endit