Investing.com – The Dow closed lower Thursday, as sentiment on stocks was soured by slowing global growth concerns after the European Central Bank slashed its growth forecasts and launched fresh stimulus.
The Dow Jones Industrial Average fell 0.78% or 200 points, after falling as many as 321 points. The S&P 500 lost 0.82%, while the Nasdaq Composite fell 1.13%. The S&P broke below its 200 day moving average for the first time since Feb. 12.
In the clearest signal yet the global economy is stuck in a rut, European Central Bank president Mario Draghi said "sizeable moderation" in euro-area growth would continue into the current year.
Draghi's downbeat remarks arrived just after the ECB downgraded its forecasts on euro-area growth for 2019 to 1.1% from a previous forecast of 1.7%. The central bank also detailed fresh stimulus measures intended to encourage lending, just three months after announcing an end to its bond-buying program.
Concerns about slowing global growth, fueled demand for U.S. government bonds pushing prices higher and yields lower, keeping a lid on bank stocks.
Goldman Sachs (NYSE:GS), Citigroup (NYSE:C) and Morgan Stanley (NYSE:MS) fell 1% as 10-Year Treasury yields ended the day lower.
Falling Treasury yields are seen as a headwind for banks, reducing their net interest margin, the difference between the interest income generated by operations and the amount of interest paid out to their lenders.
Tech also came under pressure as FANG stocks fell out of favor.