NEW YORK (AP) – Stocks sank Thursday after Europe's central bank president addressed the debt crisis there.
Traders and floor officials gather at a post on the floor of the New York Stock Exchange shortly after the beginning of trading, Aug. 1, 2012.
U.S. corporations with exposure to Europe have been pounded by the souring economy, including General Motors, which said Thursday that it lost $361 million before taxes in Europe, compared with a $102 million profit a year earlier.
World stock markets were mostly lower Thursday after the U.S. Federal Reserve took no new action to boost the U.S. economy and European Central Bank President Mario Draghi said the bank could intervene in bond markets to lower interest rates for troubled countries.
He said little else.
Global markets were boosted the past week after Draghi vowed to do whatever it takes to keep the euro intact as Spain's financial situation deteriorated.
Hopes have been high that the ECB would announce powerful new measures to stem Europe's chronic debt crisis but it might be restrained by German opposition to the central bank resuming big purchases of government bonds — to lower borrowing costs of financially struggling countries such as Spain or Italy — or other steps.
Dow Jones industrial average, five trading days
The European Central Bank on Thursday left its main interest rate unchanged but markets were looking for a big bond buying initiative.
Jens Weidmann, a leading ECB policymaker through his position as president of the Bundesbank, Germany's national bank, doesn't appear to be convinced that bond-buying is the right strategy. He continues to caution the ECB not to overstep its mandate of fighting inflation.
"The ECB is unlikely to meet current elevated expectations for far more aggressive action, risking another sharp turn for the worse in the markets," analysts at Daiwa in Hong Kong said in a report. "While market expectations are high, we believe that Draghi will not deliver what it is looking for, in particular large-scale bond purchases."
In early European trading, France's CAC 40 was off 0.1% at 3,317.17 and Germany's DAX dropped 0.3% to 6,733.69. Britain's FTSE 100 added 0.2% to 5,726.13. Wall Street was poised to open a little higher with Dow and S&P 500 futures both up 0.1%.
Japan's Nikkei 225 stock average finished up 0.4% at 8,653.18 while Hong Kong's Hang Seng dropped 0.7% to 19,690.20. South Korea's Kospi shed 0.6% to 1,869.40 and China's Shanghai Composite fell 0.6% to 2,111.18.
In energy trading, benchmark crude for September delivery was down 5 cents at $88.86 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 85 cents to end Wednesday in New York at $88.91 per barrel after the government said supplies have dropped more than analysts expected.
The euro was 0.2% higher at $1.226. The dollar rose 0.1% to 78.45 yen.
Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
For more information about reprints & permissions, visit our FAQ's. To report corrections and clarifications, contact Standards Editor Brent Jones. For publication consideration in the newspaper, send comments to [email protected]. Include name, phone number, city and state for verification. To view our corrections, go to corrections.usatoday.com.
USA TODAY is now using Facebook Comments on our stories and blog posts to provide an enhanced user experience. To post a comment, log into Facebook and then "Add" your comment. To report spam or abuse, click the "X" in the upper right corner of the comment box. To find out more, read the FAQ and Conversation Guidelines.
By Richard Drew, AP
Traders and floor officials gather at a post on the floor of the New York Stock Exchange shortly after the beginning of trading, Aug. 1, 2012.
Traders and floor officials gather at a post on the floor of the New York Stock Exchange shortly after the beginning of trading, Aug. 1, 2012.
U.S. corporations with exposure to Europe have been pounded by the souring economy, including General Motors, which said Thursday that it lost $361 million before taxes in Europe, compared with a $102 million profit a year earlier.
World stock markets were mostly lower Thursday after the U.S. Federal Reserve took no new action to boost the U.S. economy and European Central Bank President Mario Draghi said the bank could intervene in bond markets to lower interest rates for troubled countries.
He said little else.
Global markets were boosted the past week after Draghi vowed to do whatever it takes to keep the euro intact as Spain's financial situation deteriorated.
Hopes have been high that the ECB would announce powerful new measures to stem Europe's chronic debt crisis but it might be restrained by German opposition to the central bank resuming big purchases of government bonds — to lower borrowing costs of financially struggling countries such as Spain or Italy — or other steps.
Dow Jones industrial average, five trading days
The European Central Bank on Thursday left its main interest rate unchanged but markets were looking for a big bond buying initiative.
Jens Weidmann, a leading ECB policymaker through his position as president of the Bundesbank, Germany's national bank, doesn't appear to be convinced that bond-buying is the right strategy. He continues to caution the ECB not to overstep its mandate of fighting inflation.
"The ECB is unlikely to meet current elevated expectations for far more aggressive action, risking another sharp turn for the worse in the markets," analysts at Daiwa in Hong Kong said in a report. "While market expectations are high, we believe that Draghi will not deliver what it is looking for, in particular large-scale bond purchases."
In early European trading, France's CAC 40 was off 0.1% at 3,317.17 and Germany's DAX dropped 0.3% to 6,733.69. Britain's FTSE 100 added 0.2% to 5,726.13. Wall Street was poised to open a little higher with Dow and S&P 500 futures both up 0.1%.
Japan's Nikkei 225 stock average finished up 0.4% at 8,653.18 while Hong Kong's Hang Seng dropped 0.7% to 19,690.20. South Korea's Kospi shed 0.6% to 1,869.40 and China's Shanghai Composite fell 0.6% to 2,111.18.
In energy trading, benchmark crude for September delivery was down 5 cents at $88.86 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 85 cents to end Wednesday in New York at $88.91 per barrel after the government said supplies have dropped more than analysts expected.
The euro was 0.2% higher at $1.226. The dollar rose 0.1% to 78.45 yen.
Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
For more information about reprints & permissions, visit our FAQ's. To report corrections and clarifications, contact Standards Editor Brent Jones. For publication consideration in the newspaper, send comments to [email protected]. Include name, phone number, city and state for verification. To view our corrections, go to corrections.usatoday.com.
USA TODAY is now using Facebook Comments on our stories and blog posts to provide an enhanced user experience. To post a comment, log into Facebook and then "Add" your comment. To report spam or abuse, click the "X" in the upper right corner of the comment box. To find out more, read the FAQ and Conversation Guidelines.