Summary: Stronger dollar knocks Wall Street off record perch; ECB announces economic stimulus plans; Service sector, hiring point to improving U.S. economy; BP faces more monetary damage from Gulf oil spill. Conway G. Gittens reports.
PLEASE NOTE: THIS EDIT CONTAINS CONVERTED 4:3 MATERIAL Europe pulls out the bazooka to fight deflation and Wall Street likes what it hears. But the positive reaction was short-lived with stocks erasing all gains after touching record highs early in the session. A strong dollar may be one reason. The greenback jumped to a 14-month high against the euro after European Central Bank President Mario Draghi announced a cut in interest rates and a bond-buying program to start next month. Taking a look at look at some multi-nationals in the Dow: General Electric, Procter & Gamble, and Coca-Cola rose, Nike was the best of the group with a 1.4 percent rise, but 3M fell. The latest snapshots of the economy - showing more signs of a pick-up. The massive services sector in August - seeing its strongest growth in more than 6-1/2 years. The U.S. trade deficit, which is a drag on growth, actually narrowed to $40-1/2 billion in July. Private hiring up last month, but not by as much as expected and weekly jobless claims remain at levels suggesting an improving labor market. And speaking of labor...fast-food workers took to the streets nationwide again, calling for a $15-an-hour minimum paycheck. Organizers say this was the biggest protest so far. Arrests were made in several cities. On the corporate front, the historic Gulf of Mexico oil spill continues to haunt BP four years later. A U.S. District Judge says the oil giant was "grossly negligent" for its role in the worst offshore disaster in U.S. history. The ruling could add billions of dollars in fines to the more than $42 billion in charges BP has already taken. BP says it will appeal, but the stock at one point had its worst one-day slide in more than four years. Back to Europe where reviving a sluggish economy is center stage. A weaker euro may actually help offset weaker demand. Alexandre Ricard is incoming CEO of Pernod Ricard, the world's No. 2 drinks company. SOUNDBITE: ALEXANDRE RICARD, DEPUTY CHIEF EXECUTIVE, PERNOD RICARD (ENGLISH) SAYING: "We like strong dollar just because our reported numbers are in euros, so over last fiscal year, actually, the strong euro and the weak dollar had a negative impact, currency impact on our profits for recurring operations of up to 200 million euros." A weaker euro may help exports sending stock markets in Europe and France up more than 1 percent. The London FTSE was little changed.