By Sweta Singh
(Reuters) - U.S. stocks were lower in early trading on Thursday after European Central Bank's minimal rate cut and extended stimulus failed to live up to market expectations.
The ECB cut its deposit rate by 0.1 percentage points and extended its asset-purchase program into 2017.
The U.S. market opened higher with eight of the 10 major S&P 500 sectors up, but soon reversed course.
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.
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 10:18 a.m. ET (1518 GMT) the Dow Jones industrial average was down 70.09 points, or 0.4 percent, at 17,659.59, the S&P 500 was down 7.7 points, or 0.37 percent, at 2,071.81 and the Nasdaq Composite was down 12.46 points, or 0.24 percent, at 5,110.76.Nine of the 10 major S&P 500 sectors were lower with the health index's 0.93 percent fall leading the decliners.
Johnson & Johnson shares were the biggest drag on the health index.
Zafgen shares were down 2.7 percent at $6.11 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 9.2 percent to $144.45 after the company reported a better-than-expected quarterly profit.
Dyax shares rose 11.87 percent to $37.32 after the company announced early regulatory approval for its proposed acquisition by Shire Pharmaceuticals.
Declining issues outnumbered advancing ones on the NYSE by 1,955 to 855. On the Nasdaq, 1,378 issues fell and 1,076 advanced.
The S&P 500 index showed 5 new 52-week highs and 15 new lows, while the Nasdaq recorded 34 new highs and 25 new lows.
(Reporting by Sweta Singh in Bengaluru; Editing by Don Sebastian)
