Stocks, euro tumble as ECB disappoints markets

Global stocks and the euro tumbled yesterday after the European Central Bank disappointed investors who were hoping for immediate action to combat the euro zone debt crisis. The ECB signaled plans to push down borrowing costs for euro zone countries through upcoming bond purchases, though the move is likely weeks away. The central bank, which said it would wait to see if the euro zone economy slows further before cutting interest rates, pledged last week it would do what it takes to support the euro. The US Federal Reserve took a similar wait-and-see approach on Wednesday and did not announce any new stimulus measures to help revive a flagging US recovery. Data today is expected to show the US economy added 100,000 jobs in July, not enough to lower an 8.2 percent jobless rate. The Dow Jones industrial average was down 158.17 points, or 1.22 percent, at 12,813.04. The Standard & Poor’s 500 Index was down 17.21 points, or 1.25 percent, at 1,357.93. The Nasdaq Composite Index was down 21.37 points, or 0.73 percent, at 2,898.84. The euro, which had rallied above $1.24, beat a quick retreat to $ 1.2132 for its biggest one-day move in a year. It last changed hands at $ 1.2159, down half a percent. Brent crude oil edged up by 37 cents to $ 106.33 a barrel, boosted by tight North Sea supplies. But US crude fell in tandem with stocks and other growth-sensitive assets, shedding $1.17 to $87.73. Spot gold fell $10.98 to $1,587.60 Since Draghi surprised markets last week with a promise to save the euro, European shares had rallied by as much as 5 percent, the euro has risen about a cent against the dollar and yields on Italian and Spanish debt had fallen sharply. From arabnews