By Medha Singh
(Reuters) - Wall Street dropped for the fourth day on Thursday, led by financial stocks, after the European Central Bank (ECB) decided to launch a fresh round of cheap loans to revive the eurozone economy and defer interest rate hikes to at least next year.
The ECB also cut its growth and inflation forecasts, adding to a cocktail of concerns over trade tensions, Brexit uncertainty and global growth risks, which have weighed on markets over the past year.
"We are (in) a period of continued weakness and pervasive uncertainty," ECB President Mario Draghi, acknowledging that Europe's slowdown was longer and deeper than earlier thought.
U.S. 10-year Treasury yields slipped to a one-week low. The interest rate sensitive financial sector fell 1.05 percent and weighed the most among S&P sectors.
Shares of big banks Bank of America Corp (NYSE:BAC), JPMorgan Chase & Co (NYSE:JPM), Morgan Stanley (NYSE:MS), Citigroup Inc (NYSE:C) fell between 0.8 percent and 1.4 percent.
"Investors are trading off of global macro concerns because the ECB reduced eurozone growth expectation and induced more monetary stimulus," said Brant Houston, a managing director at CIBC U.S. Private Wealth Management in Denver, Colorado.
"The rally in the U.S. market looks tired. They have come a long way in a short period of time and the pace of gains are not sustainable through the full year."
After a nearly 10 percent rally in the S&P 500 this year on the back of optimism over trade negotiations and a dovish stance by the Federal Reserve, U.S. stocks have taken a pause this week, looking for triggers to drive markets higher.
The four days of losses for the S&P 500 is the longest since late December.
At 12:52 p.m. ET the Dow Jones Industrial Average was down 162.73 points, or 0.63 percent, at 25,510.73. The S&P 500 was down 14.39 points, or 0.52 percent, at 2,757.06 and the Nasdaq Composite was down 42.61 points, or 0.57 percent, at 7,463.31.
Also dragging markets lower were technology companies, which slipped 0.36 percent, hurt by a fall in marquee names including Apple Inc (NASDAQ:AAPL) and Microsoft Corp (NASDAQ:MSFT).
Only the defensive utilities and real estate sectors were trading higher.
At session lows, the benchmark index dipped below its closely watched 200-day moving average, a proxy for long-term momentum, after failing to rise above the 2,800-point mark in recent sessions.
Data showed U.S. weekly jobs claims unexpectedly fell last week, pointing to strong labor market conditions despite signs that job growth was slowing. The Labor Department report comes a day ahead of the more comprehensive non-farm payrolls report.
Among stocks, Kroger (NYSE:KR) Co tumbled 9.27 percent after the supermarket chain projected annual earnings below Wall Street forecasts.
Allergan (NYSE:AGN) Plc rose 5.05 percent, despite its depression drug failing three late-stage studies, as analysts called the failure widely expected.
Declining issues outnumbered advancers for a 1.96-to-1 ratio on the NYSE and for a 1.51-to-1 ratio on the Nasdaq.
The S&P index recorded 17 new 52-week highs and five new lows, while the Nasdaq recorded 17 new highs and 41 new lows.