Markets slide in U.S. and Europe

NEW YORK - Global markets sank Thursday after the European Central Bank announced stimulus plans that came up short of investors' forecasts. The bond market was especially roiled by the ECB's move. Bond prices in the United States and Europe fell sharply, and yields jumped.

The Dow Jones industrial average lost 252.01 points, or 1.4 percent, to close at 17,477.67. The Nasdaq composite fell 85.70 points, or 1.7 percent, to 5,037.53. The Standard & Poor's 500 index fell 29.89 points, or 1.4 percent, to 2,049.62.

The selling pushed the S&P 500 back into the red for 2015.

Long awaited, the ECB's announcement came in with a thud, amounting to only a slight cut in one of its key interest rates in an attempt to stimulate lending and help a modest economic recovery. Investors had expected to see the ECB step up its monthly purchases of bonds, as well.

"Financial markets were expecting the ECB to do 'whatever it takes' to stimulate inflation, and instead the ECB did 'maybe what it'll take' to stimulate inflation," said Guy LeBas, head of fixed income at Janney Montgomery Scott.

Europe's economy has lagged behind that of the U.S. since the financial crisis, and policymakers have struggled to keep the 19 countries that use the euro from falling into deflation or an economic contraction.

But ECB president Mario Draghi has been far more aggressive than his predecessors in trying new ways to boost the economy, including the current program of negative interest rates and bond buying.

"In the last couple of years, Mario Draghi and the ECB would typically over-deliver on what they indicated they would do to help stimulate the economy," said Bob Michele, head of global fixed income at JPMorgan Asset Management. "So a lot of investors overbought bonds on expectations that Draghi would over-deliver. This time, he didn't, and he disappointed the market quite a bit."

The ECB's announcement caused the euro to jump 3 percent against the dollar, a large move for currencies, to $1.0975.

Investors had been betting against the euro ahead of the announcement, expecting that more central bank stimulus would put pressure on the currency. Investors had to unwind those positions, causing Thursday's oversized move in the currency market.

In fuels trading, benchmark U.S. crude jumped $1.14, or 2.9 percent, to close at $41.08 a barrel on the New York Mercantile Exchange. Brent crude, which is used to set prices for international oils, climbed $1.35, or 3.2 percent, to $43.84 a barrel in London.

Heating oil rose 5.4 cents to $1.359 a gallon, wholesale gasoline rose 0.3 cent to $1.296 a gallon, and natural gas rose 1.6 cents to $2.181 per thousand cubic feet.

In metals trading, gold rose $7.40, or 0.7 percent, to $1,061.20 an ounce, silver rose 7 cents to $14.08 an ounce, and copper rose 3 cents to $2.06 a pound.