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Wall Street ends flat as Draghi disappoints
March 10, 2016 / 12:29 PM / 2 years ago

Wall Street ends flat as Draghi disappoints

(Reuters) - U.S. stock indexes ended a volatile session little changed on Thursday after the European Central Bank reduced interest rates but ECB chief Mario Draghi confounded investors who expected multiple rate cuts by saying more were unlikely.

Stocks jumped early in the day after the ECB pushed its deposit rate deeper into negative territory and increased its asset-buying program to 80 billion euros a month from 60 billion in an effort to boost growth in the region.

“The world was really, really happy with this mainly because we’re all addicted to zero interest rates,” said Kim Forrest, research analyst at Fort Pitt Capital Group in Pittsburgh. “It’s free money.”

When Draghi said future cuts would happen only under extreme circumstances, investors expecting even lower rates switched their strategy to risk off, Forrest said.

At the same time, she said, fears that lower interest rates in Europe would harm U.S. banks and negatively impact exports by leading to euro devaluation weighed on the market further.

The Dow Jones industrial average .DJI fell 5.23 points, or 0.03 percent, to 16,995.13, the S&P 500 .SPX gained 0.31 points, or 0.02 percent, to 1,989.57 and the Nasdaq Composite .IXIC dropped 12.22 points, or 0.26 percent, to 4,662.16.

Traders work on the floor of the New York Stock Exchange shortly after the opening bell in New York March 9, 2016. REUTERS/Lucas Jackson

U.S. jobless claims fell more than expected last week to their lowest levels since October, pointing to sustained strength in the labor market that should further dispel fears of a recession.

The U.S. Federal Reserve has said it is on track to raise interest rates gradually this year, but its decision remains data-dependent. The Fed is to meet on March 15-16.

Shares of Dollar General (DG.N) were up 10.7 percent to $83.23 after it reported better-than-expected same-store sales growth. Rival Dollar Tree (DLTR.O) was up 4 percent.

Declining issues outnumbered advancing ones on the NYSE by a 1.33-to-1 ratio while on the Nasdaq, a 1.85-to-1 ratio favored decliners.

The S&P 500 posted 30 new 52-week highs and two new lows; the Nasdaq recorded 52 new highs and 70 new lows.

Volume on U.S. exchanges was 8.42 billion shares, compared with the 8.54 billion daily average over the last 20 sessions.

Crude oil prices, a major driver of the market so far this year, delinked from stocks, at least for this session. Brent futures LCOc1 fell more than 2 percent 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. U.S. crude CLc1 fell 1 percent.

Reporting by Laila Kearney; Editing by Dan Grebler

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