Stocks Finish Day Lower, European Central Bank Disappoints
(NEW YORK) -- New worries about the shaky financial situation in Europe forced U.S. markets down Thursday. Investors may have been disappointed with the European Central Bank's (ECB) obscurity in addressing the region's debt troubles.
The Dow Jones Industrial Average dropped 92 points to close at 12,879. The Nasdaq and the S&P both lost 10, closing at 2,909 and 1,365, respectively.
Traders on Wall Street were looking for more specifics from Europe's central bank officials about plans to solve the region's debt crisis. When the ECB failed to take decisive action Thursday, stocks started moving lower. Economist Joel Naroff with Naroff Economic Advisors in Holland, Pa., says uncertainty is never good for markets.
"They want clarity, so that they can be a little bit more certain that the European Central Bank will indeed be taking the steps that are necessary to keep the Euro together and Italy and Spain in survival mode," he said.
Last week stocks shifted upward on reports that ECB president Mario Draghi had pledged to do "whatever it takes" to protect the euro. On the heels of that news, investors anticipated more concrete solutions from ECB such as plans for bond purchases. Naroff says the ECB needs to offer more specifics.
"What they're doing is making it clear they have the intentions to take whatever steps are necessary, but we really don't know fully what those steps will be, so what the markets are doing are being somewhat uncertain about where Europe's going. And when we are uncertain about where Europe's going, the market gets uncertain about its future," he said.
"At this point, we need to know precisely what they're going to do, the extent to which they're going to do it, who's involved. We need the details."
As for U.S. economic data, there's new trouble in the nation's manufacturing sector. Companies placed fewer orders with U.S. factories in June than in May, with factory orders falling by 0.5 percent. It's the third time in four months that the orders declined.
The July employment numbers are due out on Friday. The weekly numbers show a jump in first-time filings, but the Labor Department says the increase could be skewed by seasonal factors. The less-volatile four-week average fell for the sixth week in a row.
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