Wall Street ends flat as Draghi dis­ap­points

The Pak Banker - - 6BUSINESS -

U.S. 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 .DJI fell 5.23 points, or 0.03 per­cent, to 16,995.13, the S&P 500 . SPX gained 0.31 points, or 0.02 per­cent, to 1,989.57 and the Nas­daq Com­pos­ite .IXIC dropped 12.22 points, or 0.26 per­cent, to 4,662.16. U.S. job­less claims fell more than ex­pected last week to their low­est lev­els since Oc­to­ber, point­ing to sus­tained strength in the la­bor mar­ket that should fur­ther dis­pel fears of a re­ces­sion.

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