Markets | Thu Mar 10, 2016 1:06pm EST
Wall Street reversed course and slipped sharply into the red in volatile trading on Thursday after European Central Bank President Mario Draghi signaled an end to further rate cuts.
Stocks had jumped earlier in the day after the ECB pushed deposit rate deeper into negative territory and increased its asset-buying program to 80 billion euros a month from 60 billion euros in an effort to boost growth in the region.
“This is a classic case of ‘buy the rumor and sell the news’,” said Adam Sarhan, chief executive of Sarhan Capital in New York.
“Over the last few weeks, stocks had soared in anticipation of more easy money, and now that we’ve got the news, stocks are selling off,” Sarhan said.
Crude prices, the stock market’s other major driver, fell after Reuters reported that a proposed meeting between major oil producers to discuss an output cut was unlikely to take place without Iran’s participation. Brent crude was off more than 2 percent. [O/R]
At 12:31 p.m. ET (1731 GMT), the Dow Jones industrial average .DJI was down 107.41 points, or 0.63 percent, at 16,892.95, the S&P 500 .SPX was down 10.84 points, or 0.54 percent, at 1,978.42 and the Nasdaq Composite .IXIC was down 31.36 points, or 0.67 percent, at 4,643.02.
All 10 major S&P sectors turned negative, led by the energy sector .SPNY, which fell 1.13 percent. Exxon (XOM.N) was off 1.3 percent at $81.35.
The S&P financial sector .SPSY was down 1 percent, led by a 2 percent fall in JPMorgan (JPM.N) shares.
While economic data from Asia and Europe show faltering growth, a recovery in the U.S. economy has been gathering momentum.
U.S. jobless claims fell more than expected to their lowest levels since October, pointing to sustained strength in the labor market that should further dispel fears of a recession.
The Fed has said it is on track to raise interest rates gradually this year, but its decision will depend largely on the economy’s capacity to absorb an increase amid the global economic turmoil. The Fed is set to meet on March 15-16.
Declining issues outnumbered advancing ones on the NYSE by 1,966 to 988. On the Nasdaq, 1,850 issues fell and 831 advanced.
The S&P 500 index showed 29 new 52-week highs and one new low, while the Nasdaq recorded 50 new highs and 47 new lows.