Forexpros – U.S. stocks opened sharply lower on Thursday, after comments by European Central Bank President Mario Draghi disappointed market expectations for full blown monetary easing measures.
During early U.S. trade, the Dow Jones Industrial Average dropped 0.61%, the S&P 500 index declined 0.51%, while the Nasdaq Composite index eased 0.09%.
Sentiment broadly weakened after Draghi said the ECB may undertake bond purchases in order to bring down the “exceptionally high” borrowing costs of stressed euro zone members, but provided no explicit details on how and when these activities may be carried out.
The statement disappointed market expectations for bold steps to counter the debt crisis in the euro zone, which have been building since Draghi pledged last week to do whatever is necessary to preserve the euro.
The ECB left interest rates unchanged at a record low 0.75% earlier.
Financial stocks were broadly lower, as shares in Citigroup tumbled 1.68% and Goldman Sachs plunged 1.53%, while JP Morgan and dropped 0.83%.
Among earnings, Abercrombie & Fitch saw shares sink 12.87%, after the retail company warned that second-quarter profit will be about half of what analysts had been expecting, as it experiences a double-digit drop in same-store sales.
Sony was also sharply lower, with shares plummeting 6.84% after the Japanese firm reported a 77% fall in operating profit to JPY6.28 billion yen in the second quarter.
On the upside, health insurer Cigna gained 2.88%, after saying revenue beat estimates and raising its full-year forecast as membership numbers grow.
Elsewhere, global agribusiness group Monsanto jumped 1.33%, after it was awarded USD1 billion in damages in a patent infringement trial against DuPont and its agricultural crop subsidiary DuPont Pioneer.
Also in company news, American International Group added 0.16% on reports it is looking to buy back a large chunk of its shares from the U.S. government, whose stake in the group could subsequently go below 50% by this autumn, according to the Wall Street Journal.
Meanwhile, Rupert Murdoch’s News Corp saw shares retreat 0.22%, although the company announced earlier that it had gained regulatory approval to buy Consolidated Media Holdings in a AUD2 billion deal that could possibly strengthen its hold on pay-television in Australia.
Other stocks in focus included Kraft, AIG and LinkedIn, due to publish results after the closing bell.
Across the Atlantic, European stock markets were sharply lower. The EURO STOXX 50 plunged 2.03%, France’s CAC 40 tumbled 1.71%, Germany’s DAX plummeted 1.52%, while Britain’s FTSE 100 dropped 0.59%.
During the Asian trading session, Hong Kong’s Hang Seng Index dropped 0.66%, while Japan’s Nikkei 225 Index added 0.13%.
Also Thursday, the U.S. Department of Labor said the number of people who filed for unemployment assistance last week rose to a seasonally adjusted 365,000, from an upwardly revised 357,000 in the preceding week.
Analysts had expected initial jobless claims to rise to 370,000 last week.
Later in the day, the U.S. was to release government data on factory orders.
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