The ECB said it would offer further liquidity measures to help ease the region’s debt crisis, but Draghi said: “the outlook remains subject to high uncertainty and substantial downside risks.”
Stock futures initially rallied in the premarket session, but the enthusiasm was soon tempered by Draghi’s cautious remarks, which seemed to rub off on investors.
“Over the last few days what’s been coming out of the press is that they’re readying this big bazooka to stabilise the problem, and some of the perceived comments have been refuted today,” said Tom Donino, co-head of trading at First New York Securities in New York.
The Dow Jones industrial average was down 47.87 points, or 0.39 per cent, at 12,148.50. The Standard & Poor’s 500 Index fell 8.27 points, or 0.66 per cent, at 1,252.74. The Nasdaq Composite Index took off 10.65 points, or 0.40 per cent, at 2,638.56.
Wall Street rose for three straight days this week on optimism European leaders forge a plan to fight the crisis at a Eurozone summit on Friday.
Draghi’s comments are “smacking the market pretty good but to be honest with you the market is holding in a lot better than I would have anticipated it doing,” said David Lutz, managing director of trading, Stifel Nicolaus Capital Markets, Baltimore.
Losses were limited as US jobless claims fell more than expected in the latest week, a sign the labour market recovery was gaining momentum. Claims fell to a nine-month low.
Boeing’s biggest union ratified a contract extension late on Wednesday, ensuring a new version of the planemaker’s 737 narrowbody plane will be built in Washington state and likely ending a dispute with the National Labor Relations Board. Shares of the Dow component were up 0.4 per cent at $70.89.
Costco Wholesale fell 2.2 per cent to $85.51 after reporting its first-quarter results.
Mexican stocks fell sharply after the European Central Bank’s caution about stepping up bond purchases. The IPC stock index shed 1.13 per cent to 36,635 points.