Dow Is Down Triple Digits on ECB Inaction

Weinberg noted that Draghi's statement about being "really surprised at the amount of attention my remarks last week received in the press," translates to, "I cannot deliver the promises I implied in my London speech last week ... you must have misunderstood me."

The euro eased after the ECB announcement, while Spanish and Italian 10-year yields rose.

The FTSE in London settled 0.9% lower and the DAX in Germany closed down by 2.2%.

The Labor Department said before the markets opened Thursday that initial jobless claims for the week ended July 28 increased by 8,000 to 365,000 from the previous week's upwardly revised figure of 357,000. The four-week moving average was 365,500, a decrease of 2,750 from the previous week's revised average of 368,250. Economists, on average, expected initial jobless claims of 370,000.

Continuing claims for the week ended July 21 fell by 19,000 to 3.272 million.

Before the jobless claims report, executive outplacement services provider Challenger Gray & Christmas said planned layoffs in the U.S. fell for the second straight month in July, as employers announced job cuts totaling 36,855, down 2% from 37,551 in June.

Meanwhile, the Commerce Department reported that factory orders fell 0.5% in June after increasing by a downwardly revised 0.5% in May. Economists predicted June orders would increase by 0.5%.

September crude oil futures fell 85 cents to settle at $88.91 a barrel. December gold futures fell by $16.60 at $1,590.70 an ounce.

The benchmark 10-year Treasury was rising 14/32, diluting the yield to 1.482%. The greenback was gaining 0.43%, according to the dollar index.

In corporate news, General Motors(GM) shares fell 2.6% after the automaker posted profit of 90 cents a share, which topped the Wall Street target of 75 cents, though its net income took a hit from losses in Europe.

Abercrombie & Fitch(ANF) shares plunged 14.6% after the apparel retailer slashed its second-quarter outlook amid tepid demand for its higher end items.

Shares of Gap(GPS) popped by 12.8% after the clothing retailer announced Thursday that July same-store sales increased by a better-than-expected 10% and that it expects a year-over-year rise in second-quarter earnings.