The Business Times

US: Stocks tumble on weak ECB outlook

Published Thu, Mar 7, 2019 · 10:13 PM

[NEW YORK] Wall Street stocks tumbled Thursday after a downcast European Central Bank policy announcement sharpened worries about slowing global growth.

The Dow Jones Industrial Average dropped 0.8 per cent to 25,473.23, its fourth straight decline.

The broad-based S&P 500 shed 0.8 per cent to 2,748.93, while the tech-rich Nasdaq Composite Index sank 1.1 per cent to 7,421.46.

The declines came after the ECB slashed its 2019 economic growth and inflation forecasts and announced fresh stimulus, with new rounds of cheap loans to banks to keep credit flowing.

"We're coming out of, and maybe we still are in a period of continued weakness and pervasive uncertainty," ECB chief Mario Draghi told reporters.

The announcement came only a day after the Organization for Economic Cooperation and Development cut its global growth forecast for the year.

"For once, we can see the problems with European stocks jump to the American market," said Gregori Volokhine of Meeschaert Financial Services.

"The ECB's bearish tone had a big effect on investor psychology."

Declines were fairly broad-based, with Dow members Caterpillar, Goldman Sachs and Home Depot all losing one per cent or more.

Large tech names were also under pressure. Amazon, Facebook and Netflix all dropped two per cent or more.

Supermarket chain Kroger sank 10 per cent after reporting disappointing fourth-quarter profits. Analysts said investments on e-commerce offerings had dented profitability.

Burlington Stores dived 11.9 per cent following a lackluster fourth quarter. Comparable sales rose just 1.3 per cent, compared with a 5.9 per cent rise in the year-ago period.


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