US Stocks Decline on ECB Statement as Energy Shares Drop

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US Stocks Decline on ECB Statement as Energy Shares Drop

US stocks dropped after benchmark indexes closed at record highs, with energy shares dropping and the European Central Bank saying that it would wait until the next quarter before considering additional stimulus measures.

Chevron Corp and Exxon Mobil Corp dropped around 1.5% for the largest losses in the Dow Jones Industrial Average. Microsoft Corp climbed 1.4% and Barnes & Noble Inc said that it would buy back the stake of the company in its Nook business.

According to Bloomberg, the Standard & Poor’s 500 dropped 0.3% to 2,068.42. The Dow dropped 0.3% or 53.67 points to 17,858.95. Trading in the S&P 500 companies was around 10% below the 30-day average for this time of day.

Senior market strategist at Voya Investment Management LLC, Karyn Cavanaugh said, “Draghi’s going to have to start doing some bond-buying if they want to get out of the malaise they’re in. I think it’ll eventually be good news and QE will have to happen. The writing is on the wall.”

Equities dropped as Mario Draghi, ECB president said that policy makers will wait until next quarter before assessing whether additional stimulus measures were required. His comments dampened speculations that the central bank was poised to start a program of the sovereign-debt purchases called quantitative easing or QE.

European stocks were also in the red and the DAX index of Germany erased gains.

Chief market strategist at CMC Markets, Colin Cieszynski was quoted by Market Watch as having said, “Speculation that ECB president Draghi would ride in and save the day was running so high this morning that the DAX touched an all-time high just before the press conference started. Attitudes quickly reversed course.”

Energy companies dropped 1.3% reversing the gains of three days with oil slipping as much as 1.9%. Newfield Exploration Co. and Ensco Plc lost more than 3% and Pioneer Natural Resources dropped 3.5%.

To contact the reporter of the story: Jonathan Millet at john@forexminute.com