Global stocks slammed by ECB; euro jumps most since 2009

Thu Dec 3, 2015 4:56pm EST
 
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By Sinead Carew

NEW YORK (Reuters) - U.S. and European stocks closed down sharply on Thursday and the euro enjoyed its biggest one-day percentage rise in well over six years as investors reacted to the European Central Bank's latest policy easing measures.

U.S. bond yields saw their biggest daily rise in more than two years after the ECB cut its deposit rate by the minimum 0.1 percentage point most traders had expected, to -0.3 percent. It extended its asset purchase program but did not increase the amount of government bonds it buys each month.

Oil futures were boosted by the sharp decline in the dollar and speculation ahead of Friday's OPEC meeting.

The euro EUR= surged 3 percent against the dollar. Last week, speculators had amassed the largest short position in the euro since May in anticipation of more ECB stimulus.

"People were very, very short euros," said Jason Leinwand, managing director at Riverside Risk Advisors in New York. "People were looking for a bigger cut in rates out of the ECB and they didn’t get it."

Wall Street's benchmark S&P 500 stock index .SPX had its biggest one-day percentage decline since Sept. 28, also in reaction to the European monetary policy move.

The Dow Jones industrial average .DJI fell 252.01 points, or 1.42 percent, to 17,477.67, the S&P 500 .SPX lost 29.89 points, or 1.44 percent, to 2,049.62 and the Nasdaq Composite .IXIC dropped 85.70 points, or 1.67 percent, to 5,037.53.

Earlier in the day the FTSEurofirst .FTEU3 ended down 3.3 percent as trading screens went red across the region in that index's biggest daily percentage drop since Aug. 24.   Continued...

 
Traders work on the floor of the New York Stock Exchange December 3, 2015. REUTERS/Brendan McDermid