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Stocks slide on disappointing eurozone stimulus

Stocks slide Thursday, Dec. 3, 2015, on disappointment

Stocks slide Thursday, Dec. 3, 2015, on disappointment in the eurozone stimulus. Federal Reserve Chair Janet Yellen's speech to the Economic Club of Washington on Wednesday, Dec. 2, 2015, appears on a television screen on the floor of the New York Stock Exchange. Credit: AP / Richard Drew

Global markets sank Thursday after the European Central Bank announced stimulus plans that came up short of what investors had hoped. The bond market was especially roiled by the ECB’s move. Bond prices in the United States and Europe fell sharply, and yields jumped.

At the close, the Dow Jones industrial average lost 252.01 points, or 1.4 percent, to 17,477.67. The Standard & Poor’s 500 index fell 29.89 points, or 1.4 percent, to 2,049.62 and the Nasdaq composite fell 85.70 points, or 1.7 percent, to 5,037.53. The selling pushed the S&P 500 back into the red for 2015.

The ECB’s stimulus plans, long awaited, came in with a thud on Thursday. The ECB announced a slight cut in one of its key interest rates in an attempt to stimulate lending and help a modest economic recovery. Investors had expected to see the ECB step up its monthly purchases of bonds as well.

The ECB’s announcement caused the euro to jump 3 percent against the dollar, a large move for currencies, to $1.0975. Investors had been betting against the euro before of the announcement, expecting that more central bank stimulus would put pressure on the currency. Investors had to unwind those positions, causing Thursday’s oversized moved in the currency market.

“People aren’t sure where to put their money so everyone just went to cash,” said J.J. Kinahan, chief strategist at TD Ameritrade.

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