U.S. stocks are sliding in early trading Thursday after the head of the European Central Bank said there was no existing plan for large-scale government bond purchases, as many in the markets had hoped.
ECB President Mario Draghi's remarks came after the bank cut its benchmark interest rate and took other modest steps to help shore up Europe's financial system. His comments also sent the euro lower against the dollar.
The Standard & Poor's 500 index fell 8, or 0.6 percent, to 1,253. The Nasdaq slipped 10, or 0.4 percent, to 2,638.
In France, French President Nicolas Sarkozy and German Chancellor Angela Merkel tried to muster support from other European leaders for their latest bid to save the euro currency from collapsing under the weight of huge government debts. A summit that begins later Thursday has been billed as a make-or-break moment to convince markets that Europe will take bold enough action to prevent the euro from breaking up.
Among companies making large moves, Costco Wholesale Co. fell 2.5 percent after reporting earnings that fell short of analysts" expectations. The retailer said higher costs ate up much of a 12.5 percent increase in sales.
Amgen rose 1.4 percent after it said it plans to spend about $5 billion on buying back its stock from investors. The drugmaker expects to acquire more than 9 percent of its outstanding stock.
DemandTec Inc. jumped 55 percent after International Business Machines Corp. said it would by the software company for $440 million in cash. DemandTec's software helps businesses set prices and create marketing strategies for products they sell.
MEMC Electronic Materials Inc. jumped 7.4 percent, the most in the S&P 500 index. The solar energy company said it would eliminate 20 percent of its workforce and cut other costs.
The stock market's drop came despite new figures showing that the number of people applying for unemployment benefits fell last week to the lowest level in nine months.