World : Stocks slip, euro gains as ECB holds line on stimulus
NEW YORK : A gauge of global equity markets fell modestly and the euro strengthened on Thursday after the European Central Bank fell short of market expectations as it offered few clues on an extension of its bond-buying program.European Central Bank President Mario Draghi said the bank was looking at options to enable it to pursue the money-printing program, but maintained the March end-date for the plan, disappointing investors who were looking for more immediate action.
After a mixed bag of data over the past month in Europe, including poor German industrial orders this week, many market participants had speculated the ECB might take additional actions in order to stimulate Euro Zone growth.
“Markets had a bit of an expectation built into it,” said Art Hogan, chief market strategist at Wunderlich Securities in New York.
“Not getting what is expected is always going to be disappointing, and that has sort of manifested itself a little bit more in currency markets than it has in equity markets.”
The euro gained ground after Draghi’s comments, hitting a two-week high of $ 1.1326 before paring gains to trade up 0.12 percent at $ 1.125. The dollar touched a low of 94.465 against a basket of major currencies before rebounding to trade up 0.1 percent at 95.054.
European shares closed lower, with the FTSEurofirst 300 off 0.38 percent at 1,374.26.
A 2.5-percent decline in shares of Apple weighed on each of the three major U.S. stock indexes in the wake of its annual event on Wednesday. The company also said it would not release details on first-weekend sales of the newly announced iPhone 7.
The Dow Jones industrial average fell 55.34 points, or 0.3 percent, to 18,470.8, the S&P 500 lost 6.05 points, or 0.28 percent, to 2,180.11 and the Nasdaq Composite dropped 28.37 points, or 0.54 percent, to 5,255.55.
MSCI’s all-country world index declined 0.33 percent after touching a 13-month high in the prior session.
German government bond yields extended earlier gains, up 6.2 basis points on the day at minus 0.07 percent after hitting a high of minus 0.054 percent. U.S. Treasury yields also rose, with benchmark 10-year Treasury notes down 14/32 in price to yield 1.587 percent, from 1.539 percent late on Wednesday.
The focus will now begin to shift to the U.S. Federal Reserve two-day policy meeting on September 21-22 as investors look for clues on the timing of a rate hike. Expectations are for the Fed to hold rates unchanged despite another round of strong labor market data on Thursday.
Oil shares surged after U.S. inventory data showed a surprisingly large drawdown in crude stocks as imports into the U.S. Gulf Coast slid last week due to Tropical Storm Hermine.
Brent crude was up 3.6 percent at $ 49.69, after hitting a peak of $ 49.93, U.S. crude was last up 4.4 percent at $ 47.51 after hitting a one-week high of $ 47.58, marking the highest level since Aug. 26 for both.
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