U.S. stocks fluctuated before testimony from Federal Reserve Chair Janet Yellen on the economic outlook, while the scale of the European Central Bank’s additional stimulus measures disappointed some investors.
The Standard & Poor’s 500 Index rose 0.2 percent to 2,083.56 at 9:32 a.m. in New York, after falling 1.1 percent yesterday amid a plunge in oil prices. Equity futures earlier swung between gains and losses amid the ECB’s moves and comments from President Mario Draghi.
The ECB will extend its quantitative easing program until at least March 2017 and broaden the range of assets purchased while keeping the pace of monthly purchases steady at 60 billion euros ($65 billion), Draghi said. The bank’s 25-member Governing Council cut its deposit rate to minus 0.3 percent, in line forecasts by economists in a Bloomberg survey. Policy makers left the main refinancing rate and the marginal lending rate unchanged.
Draghi had been preparing markets for further stimulus since October, prompting economists surveyed by Bloomberg to unanimously predict the central bank would boost its efforts this week.
Investors also await testimony from Fed Chair Janet Yellen on the economic outlook. Yellen will appear before the congressional Joint Economic Committee at 10 a.m. in Washington, delivering a prepared statement and responding to questions from members. Yellen in a speech yesterday signaled confidence in the outlook, laying the groundwork for a December interest-rate increase. Traders are pricing in 76 percent odds the Fed will raise rates at the conclusion of its next meeting on Dec. 16.
A report today showed applications for unemployment benefits rose last week, maintaining a see-saw pattern around four-decade lows that shows persistent strength in the labor market. In addition to the claims data, investors will get other clues on the health of the economy today. Factory orders for October probably increased, while a gauge for the services industry slipped, economists forecast.
Source : Bloomberg