NEW YORK (AP) – U.S. stocks moved lower in late morning trading Thursday after European Central Bank President Mario Draghi hinted that the bank is ready to back a big monetary stimulus, but will be waiting until next year.
KEEPING SCORE: The Dow Jones industrial average fell 94 points, or 0.5 percent, to 17,819 as of 10:50 a.m. Eastern time. The Standard & Poor’s 500 index fell 11 points, or 0.5 percent, to 2,063 and the Nasdaq composite was down 12 points, or 0.3 percent, to 4,762.
EUROPE: The ECB decided to keep its main interest rate unchanged at a record low of 0.05 percent. Although Draghi failed to announce new stimulus, he hinted that the bank could act early next year. He said the ECB will reassess the success of its existing stimulus programs and the impact of low oil prices on Europe’s economy. If needed, the ECB could do more, he said.
It was a clear hint that the bank could pursue large-scale purchases of government bonds, a step which involves pushing newly created money into the economy to raise growth and inflation. The policy, known as quantitative easing, or QE, has been used by the U.S. Federal Reserve, Bank of England and Bank of Japan. Investors expressed concern that Draghi was not moving faster.
ANALYST’S TAKE: Jonathan Loynes, chief European economist at Capital Economics, expects a program of sovereign debt purchases to be launched in January. “But whether it will be big and effective enough to revive the eurozone economy is another matter,” he added.
EUROPE RETREATS: European markets were broadly lower after Draghi’s comments. Germany’s DAX fell 1.3 percent, France’s CAC 40 dropped 1.8 percent and the U.K.’s FTSE 100 declined 0.6 percent.
PAYROLLS LOOMING: In the U.S., the main focus in the markets will be the November jobs report, which comes out Friday. Following some solid economic data on Wednesday from private payrolls firm ADP, economists expect that employers added 225,000 jobs last month and that the unemployment rate slipped to 5.7 percent from 5.8 percent.
CLEARANCE: Barnes & Noble dropped $1.98, or 9 percent, to $20.20 after the company terminated its commercial agreement with Microsoft for its Nook e-reader. Barnes & Noble bought out Microsoft’s stake in the Nook for $120 million in cash and stock, freeing the company to spin off its Nook business down the road.
ENERGY: Oil prices resumed their slide. Benchmark U.S. crude fell 52 cents at $66.86 a barrel on the New York Mercantile Exchange. Brent crude lost 62 cents to $69.92 a barrel.
BONDS: U.S. government bond prices rose. The yield on the 10-year Treasury note fell to 2.26 percent from 2.28 percent late Wednesday.