U.S. stocks closed fractionally mixed Thursday after volatile trading, as Wall Street digested the European Central Bank (ECB) decision to cut the benchmark interest rate to a record low of zero percent.
The Dow Jones Industrial Average edged down 5.23 points, or 0. 03 percent, to 16,995.13. The S&P 500 edged up 0.31 point, or 0.02 percent, to 1,989.57. The Nasdaq Composite Index fell 12.22 points, or 0.26 percent, to 4,662.16.
The Governing Council of the ECB decided to cut the main refinancing operations interest rate for the euro area by 5 basis points to a record low of zero percent Thursday. The interest rate on the marginal lending facility will be decreased by 5 basis points to 0.25 percent and the interest rate on the deposit facility will be decreased by 10 basis points to minus 0.40 percent, with effect from March 16, 2016.
The ECB also expanded its asset purchase program from 60 billion euros (66.81 billion U.S. dollars) to 80 billion euros (89. 08 billion dollars) per month, beginning in April. "This comprehensive package will exploit the synergies between the different instruments and has been calibrated to further ease financing conditions, stimulate new credit provision and thereby reinforce the momentum of the euro area's economic recovery and accelerate the return of inflation to levels below, but close to 2 percent," ECB President Mario Draghi said at a press conference following the governing council meeting.
He said he did not anticipate the need to reduce rates further, but added that new facts could change the situation. "Draghi managed to do enough to garner an initial positive market reaction. He has another opportunity to impress at the news conference, but for now, the ECB has defied the skeptics and achieved a tiny bit more traction in its efforts to reinflate the EU economy," said Chris Low, chief economist at FTN Financial.
On the U.S. economic front, in the week ending March 5, the advance figure for seasonally adjusted initial jobless claims decreased 18,000 from the previous week's revised level to 259,000, below market consensus of 272,000, said the Labor Department Thursday. The 4-week moving average was 267,500, a decrease of 2,500 from the previous week's revised average.
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