Stocks waver on euro drop, ECB event
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The Euro currency is front page news on Wall Street. The reason: the Euro is in a nose dive against the Dollar. Today, the Euro fell below 1.06 for the first time in 12 years. Image courtesy AP Jason Allen
Wall Street is still reacting to the sharp decline in the euro and its impact on global financial assets following the launch this week of a government bond-buying program by the European Central Bank.
As of 10:45 a.m. ET, the Dow Jones industrial average is up fractionally, while the S&P 500 and Nasdaq composite are each down 0.2%.
Europe markets changed direction and powered into the black as European Central Bank chief Mario Draghi said that the region’s economic recovery was gathering steam.
“The slowdown in growth has reversed,” Draghi proclaimed at an annual ECB event in Frankfurt.
The euro is at a 12-year low against the dollar,
U.S. stocks fell hard Tuesday as investors grappled with the prospect of coming Federal Reserve rate hikes, the downside to a strong U.S. dollar and renewed weakness in the hard-hit oil patch.
The Dow tumbled 333 points, or 1.9%, to close at 17,663, in its worst drop since October 9, 2014. The Standard & Poor’s 500 index dropped 35 points, or 1.7%, to 2044. The Dow and S&P 500 are now negative for 2015.
Germany’s DAX and the CAC 40 of France are each in a steep, 1.9% climb. Britain’s FTSE, which cartwheeled 2.5% lower Tuesday, is up about 0.2%.
Europe and investors globally have closely watched ECB moves aimed at goosing the region’s economy. The central bank’s long-awaited $ 1.2 trillion bond-buying program — styled after the Federal Reserve’s recently concluded “quantitative easing” initiative in the United States — got under way Monday.
The ECB is using newly printed money to buy government and corporate bonds. That is intended to raise inflation by increasing the quantity of money in the economy, lower bond-market borrowing rates, and spur growth and employment. The bond purchases are set to run through September 2016.
Contributing: The Associated Press.
For Wednesday, March 11th we take you through notable companies reporting their quarterly results as well as key economic data. On the earnings front, look for handbag maker Vera Bradley (VRA), apparel retailer Express (EXPR), Men's Wearhouse (MW) Newslook
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