Stocks fall after ECB move and as Yellen testifies

NEW YORK - U.S. stocks declined as Federal Reserve Chair Janet Yellen indicated the U.S. economy is prepped for a hike in interest rates, offsetting disappointment about the level of further stimulus from the European Central Bank.

Shortly before close of trading, the Dow Jones Industrial Average fell 264 points, or 1.5 percent, to 17,465. The S&P 500 dropped 32 points, or 1.5 percent, to 2,048. The Nasdaq Composite shed 89 points, or 1.7 percent, to 5,034.

Yellen offered a largely positive forecast for the U.S. economy. In prepared testimony Thursday before a congressional panel, Yellen said "economic growth is likely to be sufficient over the next year or two to result in further improvement in the labor market.

The Fed chair's testimony largely echoed a speech delivered Wednesday to the Economic Club of Washington.

The Federal Open Market Committee meets in two weeks, with expectations running high for an increase in benchmark rates by the central bank.

Economic reports had weekly jobless claims rising last week, but holding near four-decade lows.

Separate data from the Institute for Supply Management had its non-manufacturing index falling to 55.9 in November from 59.1 the prior month.

Overseas, the ECB cut its deposit rate by 0.1 percentage points and extended its asset-buying program into 2017, moves that failed to live up to market expectations.

"The details of more QE are out are not the big bang that some had though and/or hoped for," Peter Boockvar, chief market analyst at the Lindsey Group, emailed.