Shares Continue Losing Streak for Week as Europeans Fail to Act on Debt Crisis

Stocks fell for a fourth consecutive day on Thursday after the president of the European Central Bank, Mario Draghi, disappointed investors hoping for immediate action to contain Europe’s debt crisis.

The losses on Wall Street, at less than 1 percent, were not as severe as those in the euro zone markets, where declines ranged from 2.2 percent in Germany to 5.2 percent in Spain.

Although the markets were focused mostly on the European Central Bank, traders were also looking ahead to Friday’s closely watched employment report in the United States, which could bring a volatile end to an eventful week.

Mr. Draghi said the central bank was willing to start buying Italian and Spanish government bonds to hold down borrowing costs, but it would act only after euro zone governments moved first. The announcement surprised traders, who had thought that central bank action was imminent after Mr. Draghi pledged last week to do “whatever it takes” to save the euro.

“People were looking for concrete steps and an outline of exactly what path the E.C.B. would take to do that, and there weren’t any,” said Brian Gendreau, market strategist with the Cetera Financial Group. “Just as the market went up on the ‘whatever it takes’ comments, it is coming down on the lack of specificity.”

Wall Street rallied late last week in part on hopes for new economic stimulus from the Federal Reserve but mostly as expectations grew that the European Central Bank would finally take action to protect the euro. But the Fed took no new steps to support the economy on Wednesday, although it said it was ready to act if needed.

Friday’s employment report could give a stronger indication whether the Fed, which has a freer hand than the European Central Bank, will act soon.

The government reported on Thursday that the number of Americans filing new claims for jobless benefits rose last week and that manufacturers suffered an unexpected drop in orders in June, suggesting that the economy is struggling to break out of a soft patch.

The Dow Jones industrial average fell 92.18 points, or 0.71 percent, to 12,878.88. The Standard & Poor’s 500-stock index dropped 10.14 points, or 0.74 percent, to 1,365. The Nasdaq composite index lost 10.44 points, or 0.36 percent, to 2,909.77.

Shares of the Knight Capital Group, one of Wall Street’s top market makers, plunged after a trading glitch that spread turmoil in the stock market on Wednesday wiped out $440 million of the company’s capital. The stock closed down 62.8 percent at $2.58, its lowest level since early October 1998.

Among other issues, General Motors slipped 2.6 percent, to $19.14, after it posted a smaller-than-expected loss in Europe that helped it report a better-than-expected second-quarter profit.

Gap jumped 12.8 percent to $33.17 after the clothing retailer posted its July and second-quarter sales, but the rival Aéropostale plummeted 32.8 percent to $13.08 after cutting its second-quarter forecast.

In the credit markets, the Spanish government’s 10-year bond yield rose above 7 percent again after the European Central Bank failed to take immediate action.

Investors instead turned once more to the perceived safety of the United States government debt. The price of the Treasury’s 10-year note rose 13/32, to 102 15/32, while its yield fell to 1.48 percent from 1.52 percent late Wednesday