FTSE closes down 2.4% as Dow sheds 300 points

Major European and US indices have dropped as the ECB revealed a key official was stepping down.

The S&P 500 opened down 1.3% to 1,171 and the Dow Jones shed almost 200 points to touch 11,100 in the first session after the President's announcement of a $447m stimulus package in a speech to the joint Houses of Congress yesterday evening.

The poor start to trading in the US helped push European markets to extend earlier losses: the FTSE 100 was down 2% to 5,228 shortly after the US open, with the Cac 40 down 3.2% to 2,982 in France and Germany's Dax falling 3.4% to 5,225.

The FTSE was down 2.35% to 5,215 at the close, with the Dow Jones down by 300 points to 10,995 and the S&P 500 falling 2.7% to 1,154 shortly after 5pm UK time.

Investors have once again shied away from risk assets a day after the Bank of England, European Central Bank and Federal Reserve chairman Ben Bernanke all declined to provide more concrete detail of potential stimulus measures of their own.

A Reuters report suggesting ECB board member Jurgen Stark is to step down as a result of conflict over the central bank's bond buying programme also knocked investor confidence. The ECB later said Stark was resigning for 'personal reasons'.

Prior to that announcement, the price of US crude fell by 2.6% to $87 a barrel, despite rises earlier this week, with the euro on course to shed more than 3.5% against the dollar over the course of the week as a whole.

Gold also fell, however, down almost 1.5% to $1,845 an ounce, but 10-year bond yields for Germany and the US remained at or near record lows.