U.S. stocks dropped in early trading on Thursday, a day after the Dow Jones Industrial Average and S&P 500 Index smashed record closing highs, as European Central Bank President Mario Draghi warned falling oil prices wouldn't necessarily have a positive impact on the eurozone. Draghi added the ECB will meet early next year to decide whether the troubled eurozone will need further monetary stimulus.
"Oil prices have an obvious direct impact on the price of energy and on that ground, the effect is unambiguously positive," Draghi told a news conference. But the ECB president warned that although the positive effects would help boost the economy by removing costs, there would also be negative effects on inflation, as the trouble eurozone continues to face deflationary fears. "It could alter the profile of inflation rates over the coming months, especially the next few months," he said.
Separately, data on Thursday showed fewer Americans filed for unemployment benefits last week, with jobless claims falling to 297,000, a decrease of 17,000 from the previous week's revised level. Economists are looking ahead to the U.S. nonfarm payrolls report for November, due out on Friday. Wall Street expects the report to show U.S. employers added 230,000 jobs in November, up from 214,000 in October, according to analysts polled by Thomson Reuters. The unemployment rate is expected to tick down to 5.8 percent last month after hovering around 5.9 percent in September and October.
Following Draghi's speech, the Dow Jones Industrial Average, which measures 30 large industrial stocks, dropped 86.04 points, or 0.48 percent, at 17,826.58; the S&P 500 Index, which tracks the share prices of the nation's 500 largest publicly traded companies, fell 9.88 points, or 0.48 percent, at 2,064.46. The Nasdaq Composite fell 7.93 points, or 0.17 percent, to 4,766.54.