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Traders work on the floor of the New York Stock Exchange, July 31, 2012. (BRENDAN MCDERMID/REUTERS)
Traders work on the floor of the New York Stock Exchange, July 31, 2012. (BRENDAN MCDERMID/REUTERS)

At the open: ‘Investors are angry’ Add to ...

U.S. stocks opened lower on Thursday following disappointing comments from Mario Draghi, the president of the European Central Bank.

At a press conference, Mr. Draghi said the ECB would draw up a mechanism in the coming weeks to make outright purchases to stabilize stressed euro zone borrowing costs. The statement disappointed investors who had been hoping for strong action following his recent comments to “do whatever it takes” to save the euro.

The Dow Jones industrial average was down 56.99 points, or 0.44 per cent, at 12,914.07. The Standard & Poor’s 500 Index was down 7.82 points, or 0.57 per cent, at 1,367.32. The Nasdaq Composite Index was down 22.99 points, or 0.79 per cent, at 2,897.22.

“Draghi didn’t say anything that excited us, and he set us up like a poker room full of suckers. Investors are angry, traders are angry,” said Todd Schoenberger, managing principal at the BlackBay Group in New York.

“Draghi said he would do whatever it takes, and that may be the case, but we were all expecting a shock and awe moment.”

European stocks reversed course and turned negative after the statement, with the FTSEurofirst 300 index down 0.9 per cent.

Knight Capital Group Inc shares plunged 56.8 per cent to $3 in premarket trade, a day after a computer glitch at the market maker triggered a spike in volatility shortly after the open. The company said on Thursday an erroneous trading position wiped out $440-million of its capital and will force the firm to raise money.

S&P 500 futures fell 13.3 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures lost 112 points, and Nasdaq 100 futures dropped 21 points.

Economic data showed the number of Americans filing new claims for jobless benefits rose less than expected last week, but the data continues to be influenced by distortions from seasonal auto shutdowns.

The data comes on the heels of a stronger-than-expected ADP National Employment Report and before Friday’s non-farm payrolls report for July.

At 10 a.m. (ET), a report on factory orders and revised durable goods orders for June is due.

General Motors Co. posted a smaller-than-expected loss in Europe that helped the No. 1 U.S. automaker post a better-than-expected second-quarter profit. Shares slipped 0.7 per cent to $19.52 in premarket trade.

According to Thomson Reuters data, of the 352 companies in the S&P 500 that have reported earnings through Wednesday morning, 66.2 per cent have beaten analysts’ expectations. Over the past four quarters, 68 per cent of companies beat estimates.

Retailers will also be in focus as companies report their monthly same-store sales results. Early results showed discounts and warm weather drew U.S. shoppers to malls in July, helping many retailers report healthy sales gains in what is typically a clearance month ahead of the back-to-school season.

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