US stocks fell today after the president of the European Central Bank expressed caution over more bond purchases to ease the region's debt crisis.
The ECB did cut interest rates by 25 basis points to 1.0 per cent, but ECB president Mario Draghi said the bank did
not consider cutting rates further and the decision to ease was not unanimous.
In addition, Mr Draghi was cautious about further bond purchases, saying these are not infinite.
The Dow Jones industrial average was down 45.41 points, or 0.37 per cent, at 12,150.96. The Standard & Poor's 500 Index dropped 8.86 points, or 0.70 percent, at 1,252.15. The Nasdaq Composite Index fell 19.27 points, or 0.73 per cent, at 2,629.94.
The euro fell across the board in choppy trading, with investors disappointed that the European Central Bank was not aggressive enough in dealing with the euro zone debt crisis.
"This is big - a lot of people, stocks, bonds, currencies, had been counting on the ECB and he's basically pulled the rug out from under the market," said Brian Dolan, chief strategist at Forex.com.
"There's a sense of shock right now because he previously suggested that if EU leaders got things together, the ECB
would step up bond purchases and provide support. Mr Draghi is now suggesting he was surprised by that interpretation and that he did not signal big bond purchases."
Traders also said the market perceived the easing of collateral requirements for euro zone banks as more risky
because the ECB is lowering lending standards.
The euro fell to session lows at $1.33120 and was last at $1.33240, down 0.7 per cent.
Reuters
