Stocks, euro slip as U.S. jobs report awaited

Thu Jul 5, 2012 6:04pm EDT
 
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By Barani Krishnan

NEW YORK (Reuters) - U.S. stocks and the euro slid on Thursday as new stimulus measures by major central banks failed to spur confidence, with investors keenly awaiting the monthly U.S. jobs report for signs of whether the European debt crisis is weighing on the U.S. recovery.

In expected moves, the European Central Bank cut its main interest rate to a record low and the Bank of England announced it would buy 50 billion pounds of assets with newly created money, while China surprised investors with a cut in its lending rate for the second time in two months.

But euphoria over those measures, which initially drove European equities to a two-month high, had faded by the time Wall Street opened. U.S. stocks on Tuesday had marked their biggest three-day rally of the year; U.S. markets were closed on Wednesday for the Independence Day holiday.

Tom Alexander, head of Alexander Trading in Savannah, Georgia, called the stimulus actions "desperate."

The central banks "are trying to put a finger in this giant dike of debt and they really don't know what to do or how to do it," he said.

As the day progressed, investors were asking if the U.S. Federal Reserve would launch new stimulus measures that might - for a change - get Wall Street up and running again?

"If we get a couple of more bad jobs reports, it will come in with more stimulus," said John Canally, investment strategist at LPL Financial in Boston.

"Today's reports suggest they might hold off," he said.   Continued...

 
A man with an umbrella struggles against heavy rain and wind caused by Typhoon Guchol in front of a board showing the Nikkei average outside a brokerage in Tokyo June 19, 2012. REUTERS/Issei Kato