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U.S. stocks fell, following a two- day advance for the Standard & Poor’s 500 Index, as European Central Bank President Mario Draghi said substantial risks to the economy remain and banks retreated on concern over stricter international capital standards.
Draghi said the ECB can’t step up government bond purchases under its founding piece of legislation. “The treaty specifies very closely what our remit is, namely to ensure price stability in the medium term,” he told lawmakers in Brussels today. “The treaty also forbids monetary state financing.”
U.S. equities rose earlier today as European finance ministers sought to draw additional aid and form new budget rules to contain the region’s debt crisis. Ministers are holding a conference call to discuss 200 billion euros ($261 billion) in additional funding through the International Monetary Fund and the mechanics of a so-called fiscal compact that was negotiated at a Dec. 9 European Union summit, according to two people familiar with the planning.
Dow 11,812.12 -54.27 -0.46%, Nasdaq 2,544.16 -11.17 -0.44%, S&P 500 1,211.54 -8.12 -0.67%
Bank of America Corp. (BAC) and Citigroup Inc. (C) slumped more than 3.8 percent on a report that large financial institutions will have to hold extra capital. JPMorgan Chase & Co. (JPM) tumbled 4.2 percent to $30.54.
Energy companies dropped 1 percent as a group, while raw material shares declined 1.3 percent. Oil futures fell 0.3 percent after rising as much as 1 percent earlier. Chevron lost 0.6 percent to $100.30. Exxon Mobil tumbled 0.4 percent to $79.84.
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