On Thursday, ECB President Mario Draghi, speaking after the central bank kept its policy on hold as expected, had said the ECB was looking at options to continue its money-printing programme, but maintained the March end-date for asset purchases. “That was not expected”, said Tim Ghriskey, chief investment officer of Solaris Group in Bedford Hills, New York.
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The S&P 500 and Dow Jones Industrial Average were down around 0.1 and 0.2 percent respectively.
Meanwhile, the U.K.’s FTSE 100 index finished up almost 0.2 percent, buoyed up by news that Micro Focus (London Stock Exchange: MCRO-GB) will merge with Hewlett Packard Enterprise (HPE) spun-off non-core software assets.
ROUGH REPORT: Pier 1 Imports tumbled 14.8 percent after the home decor retailer gave weak quarterly guidance and said its president and CEO will be leaving the company at the end of the year by mutual agreement with the board.
“The ECB not rolling out new stimulus measures opens a door for the Fed to raise its key interest rate later this year, maybe in December”, said Colin Cieszynski, senior market analyst at CMC Markets.
Hewlett Packard Enterprises slumped 3.17% after the company late on Wednesday said it agreed an $8.8bn merger deal with Micro Focus International. A sell-off in technology stocks weighed on the Nasdaq composite index, which fell 24.44 points, or 0.5 percent, to 5,259.48.
ENERGY: Oil prices lost some of their overnight surge, which followed a report indicating fuel stockpiles fell precipitously last week.
European shares closed lower, with the FTSEurofirst 300 off 0.38 per cent at 1,374.26. West Texas Intermediate, the USA benchmark price for oil, gained 1.8 percent from the previous close to start the day at $46.33 per barrel. Treasuries have returned more than 5 percent in 2016 as negative rates in Europe and Japan boosted the comparative appeal of USA debt.
Higher bond yields were important in curbing and potential demand for precious metals and silver retreated from the $20.00 area. Seoul’s Kospi added 0.1 percent, while India’s Sensex rose 0.3 percent to 29,006.18.
The central bank’s 25-member governing council also left its benchmark rate at zero and its rate on deposits from commercial banks at minus 0.4 percent.
Peer Greene King, however, dropped 3.9 percent after reporting a slowdown in like-for-like sales growth and saying that trading could get tougher as a result of Brexit.
Italian, Spanish and Portuguese 10-year government bond yields rose about 4-6 bps each. Natural gas rose 13 cents, or 4.9 percent, to $2.81 per 1,000 cubic feet. Copper held steady at $2.10 a pound.
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The yen, pushed higher over the summer by the belief that the Bank of Japan has little left in its armoury to weaken the currency, was steady, having earlier firmed by as much as a third of a percent. The euro leaped to a three-week high of 1.1316 against the dollar after the European Central Bank failed to announce a firm extension of QE beyond March – or QE3 as it is known.
