US futures slump with no concrete action in Europe
NEW YORK (AP) -- U.S. stock futures slid with no concrete action taken Thursday by the European Central Bank to address the continent's debt crisis.
Bank President Mario Draghi elevated expectations of concerted action two weeks ago that policy makers would step in to support Europe's weakest nations like Spain and Italy with a massive bond-buying program or other aggressive tools.
After being up for most of the morning, Dow Jones industrial futures slumped 86 points to 12,837 and the broader S&P futures fell 10.6 points to hit 1,359.80. Nasdaq futures slid 19 points to 2,606.
The euro began to give up ground first, losing a penny against the dollar.
Draghi appeared to suggest that economic policy makers are developing measures to address Europe's debt crisis. He said that any bond intervention would be "of a size adequate to reach its objectives" and that the concerns of investors over bond seniority will be addressed.
However, he said in late July that "the ECB is ready to do whatever it takes to preserve the euro," and many expected the bank to roll out a solid plan Thursday.
That did not happen and European markets tumbled.
The actions of the central bank in have a huge impact on U.S. companies that are exposed to Europe.
The impact of the economic crisis, which has driven half of the nations in the monetary union into recession again, was clear Thursday when General Motors posted second quarter earnings.
Net income at the automaker tumbled 41 percent. It lost $361 million in Europe before taxes, compared with last year's $102 million profit.
The European Central Bank on Thursday left its main interest rate unchanged.
In the U.S., the Labor Department said that the number of people seeking U.S. unemployment benefits rose last week, though the data was likely skewed higher by seasonal factors.
And markets are largely ignoring that number, focusing instead on the Labor Department's report for the entire month of July, which will be released Friday.
Retailers are reporting sales for July with some positive numbers.
Target said revenue at stores open at least a year rose 3.1 percent. That's better than the 2.7 percent growth expected by Wall Street.
Limited Brands, which runs Victoria's Secret and Bath & Body Works, said revenue was double what analysts expected. Gap Inc. also far surpassed predictions.
(Copyright 2012 by The Associated Press. All Rights Reserved.)