The US stocks declined for the fourth straight day as the Standard & Poor’s 500 index recorded its first four-day drop of the year amid the European shares tumbling on speculations of inefficacy of the central-bank stimulus in reviving the crisis-hit eurozone economy.
The benchmark S&P index fell 0.5 percent to 1,936.55 at 11:20 a.m. on Thursday in New York, after tumbling at 1.3 percent on Wednesday. While the Dow Jones Industrial Average dropped 65.52 points or 0.4 percent to 16,739.19, the Russell 2000 Index recorded an increase of 0.1 percent after dropping more than 10 percent from a record. Meanwhile, the Stoxx 600 Europe struggled after falling 2.1 percent, which is the biggest drop by the index since March this year.
The trading by the companies listed at the benchmark S&P 500 index was 28 percent above the 30-day average for the same time of the day.
Chad Morganlander, a money manager at St. Louis-based Stifel, Nicolaus & Co., said, “This meeting and future action is a big yawn. Draghi is sending a consistent signal that the market was expecting all along.”
On Wednesday, the S&P 500 plunged to its lowest level since August 12 amid indications of economic weakness in Europe and geopolitical turmoil as the Federal Reserve mulls over ending its bond-buying program soon.
Experts say as the Europe steps up its stimulus efforts to bring the sluggish eurozone economy on track, the United States is preparing to halt its bond-buying program (on monthly-basis) in October. Meanwhile, the investors are rigorously analyzing the economic reports to figure out whether the US growth will survive the end of quantitative easing and higher key interest rates.
The Fed has, however, maintained that it will keep the interest rates near zero for a considerable time period following the completion of purchase of assets. But it has added that future rate moves will depend on the changing dimensions of the economy.