ND: Europe Stocks, U.S. Futures Remain Lower as ECB Stands Pat
By Christopher Whittall
Stocks in Europe and U.S. futures remained lower Thursday, and the euro inched up, after the European Central Bank kept policy on hold at its first meeting since the U.K. voted to leave the European Union last month.
U.S. futures pointed to a 0.1% opening loss for the S&P 500 after Wall Street closed at fresh record highs Wednesday. The Stoxx Europe 600 was down 0.4% recently, weighed down by falls in airline shares, after markets in Asia mostly gained.
Economists hadn't expected the European Central Bank to boost its stimulus measures Thursday, but some believed ECB President Mario Draghi would signal further measures were coming in September.
Mr. Draghi demurred, however, telling a press conference that the ECB was ready to act if necessary, but bank officials wanted to examine more economic data, including projections due in September, before making a decision.
The euro, which often falls when hopes of ECB action rise, climbed 0.3% against the dollar to $1.1045 recently.
While the effects of Britain's vote to leave the EU will be mainly felt in the U.K., a host of issues still put Mr. Draghi "in a tough position, " said Carl Hammer, chief currency strategist at Swedish bank SEB.
In addition to Brexit, Europe is dealing with a wave of recent terror attacks, rising populism, a still-fragile economy and concerns over the health of the Italian banking system, Mr. Hammer said. He expects the ECB to deliver new measures in the fall.
Attention is also fixed on the U.S. corporate earnings season, which got under way last week. Shares in General Motors Co. rose 4.5% in premarket trade after the company said its profit more than doubled Thursday.
Shares in eBay Inc. were up 5.6% in premarket trade after the company posted its second straight quarter of sales gains after the closing bell Wednesday. Shares in chip maker Qualcomm Inc. gained 7.7% in premarket trading after the company reported better-than-expected sales in the latest quarter.
Investors have taken comfort from the largely solid, though unspectacular, earnings posted so far.
"Expectations were on the low side, but I think any news is good news," said James Davidson, a fund manager at J.P. Morgan Asset Management.
Earnings are giving investors "some reassurance that, for all the Brexit macro uncertainty, life goes on," said Mr. Davidson, adding the second quarter should be the low point for year-over-year U.S. earnings growth.
Investors in Europe were also focused on company earnings releases. Airline stocks were under pressure after easyJet PLC reported a fall in sales and Deutsche Lufthansa AG issued a profit warning, sending shares in the latter down over 6%.
Mining shares, meanwhile, climbed following declines earlier this week.
Meanwhile, there was further evidence of the heightened focus on central bankers Thursday with the yen jumping sharply against the dollar after Bank of Japan Governor Haruhiko Kuroda said on a prerecorded radio show from mid-June with the British Broadcasting Corp. that there was "no need and no possibility for helicopter money," government spending funded directly by the central bank.
Expectations of fresh monetary and fiscal stimulus measures from Tokyo, including increasing chatter around helicopter money, had pushed the yen lower in recent days ahead of the BoJ's meeting next week.
The yen was last around 1% higher against the buck at Yen106.1000 recently.
The ICE U.S. Dollar Index, which measures the greenback against a basket of currencies, fell 0.3%. The index hit a four-month high Wednesday as investors signaled a stronger expectation that the U.S.Federal Reserve would raise interest rates this year.
The yield on the 10-year U.S.Treasury note, meanwhile, rose slightly to 1.596% as prices fell.
Asian bourses mostly ended higher Thursday. Hong Kong's Hang Seng Index entered bull market territory with a 0.5% rise, taking gains to just over 20% since its mid-February low. Japan's Nikkei Stock Average ended 0.8% higher and Australia's S&P ASX 200 was up 0.4%.
In commodities, Brent crude oil was down 0.6% at $46.91 a barrel. Gold was flat at $1,1319 an ounce.
Write to Christopher Whittall at christopher.whittall@wsj.com
