December 14, 2017
Thursday, March 10, 2016

Wall Street ends flat as Draghi disappoints

US stock indexes ended a volatile session little changed on Thursday after the European Central Bank reduced interest rates but ECB chief Mario Draghi confounded investors who expected multiple rate cuts by saying more were unlikely.

Stocks jumped early in the day after the ECB pushed its deposit rate deeper into negative territory and increased its asset-buying program to 80 billion euros a month from 60 billion in an effort to boost growth in the region.

"The world was really, really happy with this mainly because we're all addicted to zero interest rates," said Kim Forrest, research analyst at Fort Pitt Capital Group in Pittsburgh. "It's free money."

When Draghi said future cuts would happen only under extreme circumstances, investors expecting even lower rates switched their strategy to risk off, Forrest said.

At the same time, she said, fears that lower interest rates in Europe would harm U.S. banks and negatively impact exports by leading to euro devaluation weighed on the market further.

The Dow Jones industrial average fell 5.23 points, or 0.03 percent, to 16,995.13, the S&P 500 gained 0.31 points, or 0.02 percent, to 1,989.57 and the Nasdaq Composite dropped 12.22 points, or 0.26 percent, to 4,662.16.

European shares fell after the European Central Bank President Mario Draghi said more rate cuts were unlikely, but bank shares outperformed on plans for a new round of cheap funding.

The pan-European FTSEurofirst 300 index fell 1.8 percent to 1,311.74 points, having earlier risen by as much as 2.6 percent after the ECB surprised investors with rate cuts and an expansion of its asset purchase programme.

In Asia, Japanese stocks rose for the first time in four days after a bounce in oil prices overnight strengthened risk appetite, while exporters benefited from a weaker yen and expectations of further easing from the European Central Bank.

The Nikkei share average rose 1.3 percent to 16,852.35.

The Topix subindex for electric and gas shed 3.1 percent after a Japanese court ordered operations at two of Japan's four on line nuclear reactors to halt, dimming prospects for further restart. The JPX-Nikkei Index 400 rose 1.5 percent to 12,235.49.

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