Stocks fall again on plunging euro, rate fears
A day after the Dow's worst one-day point drop in five months, stocks fell further Wednesday as Wall Street continues to react 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.
The Dow Jones industrial average fell 27.55 points, or 0.2%, to close at 17,635.39 and the Standard & Poor's 500-stock index dropped 3.92 points, or 0.2%, to 2040.24. The Nasdaq composite index fell 9.85 points, or 0.2%, to 4849.94.
The drop follows the Dow's 333-point drop Tuesday that sent the blue-chip index back into negative territory for 2015. It was the Dow's worst 2-day drop since Jan. 27-28. The S&P 500 fell 35 points Tuesday and also fell into the red for the year.
"U.S. stocks still aren't in the clear, as the dollar continues to advance against the euro, and the timing of the Federal Reserve's interest rate hike remains uncertain," Alex Eppstein of Schaeffer's Investment Research told clients in an afternoon market update.
Wall Street now fears that the Fed will start hiking rates as early as June, following a strong jobs report last Friday.
European markets rose after European Central Bank chief Mario Draghi said that the region's economic recovery was gathering steam, and that it will continue to strengthen as its recently launched bond-buying program takes hold.
Germany's DAX surged 2.7% and CAC 40 of France rallied 2.4%. Britain's FTSE 100, which fell 2.5% Tuesday, rose 0.3%.
"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. The euro is down another 1.7% today to a low of 1.0518, putting the euro currency ever closer to par with dollar.
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.
So-called quantitative easing or QE is designed to flood the eurozone economy with cheap money, lower interest rates in an attempt to spur spending and boost growth and inflation.
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. U.s.-based crude is down again in today's trading, falling 1.7% to $47.46 a barrel.
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.
Contributing: Ed Brackett.
