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Stocks tumbled in late-afternoon trading, with the Dow losing as many as 300 points at the lowest levels of the session. 

The big story in markets was the European Central Bank’s interest-rate cut deeper into negative territory, which fell short of the stimulus measures investors had expected. The euro jumped to a one-month high against the dollar after the announcement.

First, the scoreboard:

  • Dow: 17,478.77, -250.91, (-1.42%)
  • S&P 500: 2,048.18, -31.33, (-1.51%)
  • Nasdaq: 5,033.04, -90.18, (-1.76%)

And now, Thursday’s top stories:

    1. As the euro surged, the US dollar had its worst day in six years. The dollar index, a gauge of the dollar against other major currencies, dropped by more than 2% to as low as 97.59, after crossing 100 earlier in the session. Bespoke Investment Group noted to clients that it was the biggest drop for the index since March 18th, 2009. And, big drops like these aren’t usually followed by a bounce back for at least a month, Bespoke said. 
    2. The ECB cut its deposit rate, as expected. The deposit rate, charged to banks to store their extra cash, was cut to -0.30% from -0.20%. ECB president Mario Draghi announced in a press conference that the bank will extend its quantitative easing program of buying €60 billion euros in bonds per month until at least March 2017. The ECB cut its inflation outlook for 2016 (to 1% from 1.1%), and 2017 (to 1.6% from 1.7%). Draghi had said that more stimulus was on the way. However, investors had expected more drastic measures, including a 0.2% cut to the deposit rate, according to Pantheon Macroeconomics. 
    3. Meanwhile, the Federal Reserve is hurtling in the other direction. Fed chair Janet Yellen repeated to the Joint Economic Committee of Congress what she said in a speech yesterday: that the risks of holding rates steady outweigh those of lifting them. She repeated her confidence in the labor market and how it would help the Fed achieve its 2% inflation target. The November jobs report, due Friday morning, is the last data point that economists expect will convince the Fed to raise rates when it meets in two weeks. 
    4. In US economic data, initial jobless claims rose by 9,000 to 269,000 last week, according to the Labor Department. The four-week moving average of first-time unemployment-insurance claims was 269,250, down 1,750 from the prior week’s unrevised average. This left the trend near all-time lows.“With skilled labor so hard to find, we think marginal keep/let go decisions are falling in favor of employees,” wrote Pantheon Macroeconomics’ Ian Shepherdson to clients. “The trend in claims is consistent with payroll growth in excess of 250K, but in the short-term the numbers can diverge widely.” 
    5. The US services sector fell short of expectations in November. The Institute of Supply Management’s non-manufacturing index was 55.9, missing expectations. It had been forecast at 58, down from 59.1 prior. ISM’s survey showed that the growth rate in several areas including employment and new orders slowed down. And, Markit’s services Purchasing Manager’s Index (PMI) came in at 56.1, missing the estimate for 56.5. Markit’s survey was more upbeat; it noted that employment, new business, and output rose at a faster pace. And so, as is often the case, one month’s data doesn’t really give us a clear picture. 
    6. Planned job cuts fell to the lowest level in over a year last month, according to staffing firm Challenger, Gray and Christmas. The firm’s monthly report showed that US employers announced reductions totaling 30,953 last month, down 39% from October, and the lowest since September 2014. Announcements related to the troubled oil sector also dropped. “The November decline could be the quiet before a December storm or it could signal a lower-than-expected downsizing to close out the year,” CEO John Challenger said. “If recent history is any indication, it could be the latter …”

DON’T MISS: What to expect from Friday’s big jobs report »

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