By Sweta Singh
(Reuters) - U.S. stocks were lower on Thursday as European Central Bank's minimal rate cut and extended stimulus failed to impress investors.
The ECB decided to extend its asset purchase program until March 2017 but it did not increase its size as expected. A cut in deposit rate was in line with expectations, with hopes of further easing being dashed.
The euro was on track for its biggest daily gain since mid-March following ECB's announcement.
"The (ECB) commentary clearly caught people by surprise. I think most currency traders were short the euro and long the dollar, expecting different commentary from chairman Draghi," said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles.
The ECB move comes a day after Federal Reserve Chair Janet Yellen expressed confidence in the U.S. economy and said she was "looking forward" to a rate hike that will be seen as a testament to the economy's recovery from recession.
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The Fed's next policy meeting is on Dec. 15-16.
Yellen opened a Congressional committee hearing on the U.S. economy on Thursday with an upbeat assessment of where the country stands as the Fed marches towards its first interest rate hike in a decade.
"Markets are still struggling with the dichotomy between the ECB and the Fed," said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago.
Data released on Thursday showed initial jobless claims for last week rose, but remained at levels consistent with a strengthening labor market. This comes ahead of Friday's employment report, which is expected to show that the U.S. economy added 200,000 jobs in November.
At 11:24 a.m. ET (1624 GMT) the Dow Jones industrial average was down 8.12 points, or 0.05 percent, at 17,721.56, the S&P 500 was down 3.76 points, or 0.18 percent, at 2,075.75 and the Nasdaq Composite was down 0.78 points, or 0.02 percent, at 5,122.44. Nine of the 10 major S&P 500 sectors were lower with the energy index's 1.01 percent fall leading the decliners.
Exxon Mobil shares were the biggest drag on the energy index.
Zafgen shares were down 3.9 percent at $6.03 after the company said the U.S. Food and Drug Administration was putting a late-stage study testing its experimental obesity drug on complete hold.
Avago Technologies shares rose 10.2 percent to $145.76 after the company reported a better-than-expected quarterly profit.
Dyax shares rose 12.02 percent to $37.36 after the company announced early regulatory approval for its proposed acquisition by Shire Pharmaceuticals.
Declining issues outnumbered advancing ones on the NYSE by 1,843 to 1,071. On the Nasdaq, 1,343 issues rose and 1,260 fell.
The S&P 500 index showed 9 new 52-week highs and 17 new lows, while the Nasdaq recorded 45 new highs and 39 new lows.
(Reporting by Sweta Singh in Bengaluru; Editing by Don Sebastian)