Wall Street ends lower; ECB keeps interest rate unchanged

The US stocks finished well off their earlier lows in volatile trading as techs recovered, but brewing worries over Europe kept a damper on gains. The CBOE volatility index rose to close above 13.

Dow Jones Industrial Average was down 0.3% or 42.47 points at 13944.05. Nasdaq Composite was down 0.11% or 3.35 points at 3165.13. Standard & Poor's 500 was down 0.18% or 2.73 points at 1509.39.

In economic data, weekly jobless claims fell 5,000 last week to a seasonally adjusted 366,000. Economists expected a reading a relatively higher reading of 368,000.

The ECB decided to leave its main interest rate unchanged at 0.75 percent. The ECB president Mario Draghi, said that economic weakness in the euro area will continue in the early part of the year but later in 2013 economic activity should start to recover. Talking about inflation, Draghi said that the ECB expected inflation to fall below 2% in the coming months.

In the currency space, the euro slipped to two-week lows after the european central bank chief said he would monitor the impact of the currency's strength. The dollar index moved higher above 80.

In the commodity space, Brent crude edged higher after Iran rejected calls for direct talks with the united states, while US Crude prices tumbled on concerns about growing domestic stockpiles in the Midwest.

Gold prices, too held firm after comments by European Central Bank president Mario Draghi ignited renewed economic fears over the euro zone.