Europe Stocks Quiet Ahead of BOE Update -- 3rd Update
Stocks were off to a quiet start Thursday as investors parsed mixed corporate results and an update from the Bank of England.
Futures suggested the S&P 500 would pull back 0.2% from a record high while the Stoxx Europe 600 edged down 0.2% midday as first-quarter earnings reports missed analysts' forecasts.
Investors awaited a press conference with BOE Gov. Mark Carney after the Bank of England kept its rates unchanged and maintained its bond purchases as expected on Thursday. The British pound edged a touch lower after the announcement and was last down 0.4% at $1.2887.
Mr. Carney's tone will be closely watched for any hints at a change in expectations for growth and inflation, as investors assess the chance of an interest rate rise next year.
"I think there is a huge divergence in inflation outlooks at the moment, " said Markus Stadlmann, chief investment officer at Lloyds Private Bank, who expects the committee to remain in wait-and-see mode for now.
The European Commission on Thursday raised its U.K. growth forecasts for the second time in six months, but disappointing industrial production figures added to signs the economy lost momentum in the first quarter.
In European stocks, shares of media, telecoms and utilities companies led declines in morning trading, with shares of Spanish telecommunications giant Telefónica and the U.K.'s BT Group PLC lower after releasing earnings figures. Shares of UniCredit SpA climbed, however, after the Italian lender posted a first-quarter net profit after a large fourth-quarter loss.
Miners and oil-and-gas companies outperformed the rest of the market as oil and metals prices recovered. Crude prices logged their biggest daily gains since December on Wednesday, and Brent crude oil added another 1.5% to $51.01 a barrel on Thursday. Copper futures climbed 1.8% to $5,607 a ton, while gold rose 0.3% to $1,222 an ounce.
In the U.S., stock futures indicated modest losses on Wall Street following a raft of earnings reports. Shares of Snap Inc. tumbled after Wednesday's close after its first quarterly report as a public company showed it struggled to maintain user growth.
"Its results weren't dramatically worse than people were expecting. if companies like Snap don't deliver on growth expectations, these stocks get punished very quickly and hard," said Mr. Stadlmann.
Shares of technology companies had led gains in U.S. stocks so far this year by a wide margin. "I think tech stocks will continue to be a sector rich in opportunity, but you probably have to be more selective than anywhere else," he said.
Shares of Whole Foods Market, Inc. climbed ahead of the market open, after the grocery chain said it would dramatically reshape its board.
Major U.S. stock indexes have barely moved in recent sessions, hovering around all-time highs just as implied and realized volatility have collapsed. Shares have been supported by a mostly upbeat first-quarter earnings season and continued signs of strength in the U.S. and global economy.
"Right now, there's a sense that things are pretty good economically and from an earnings perspective, and that should continue" said Brad McMillan, chief investment officer at Commonwealth Financial Network. "Investors are more willing to move into the market, and less skittish to downturns."
Among clients, "we're starting to see retail investors wanting to take more risk," he added.
Earlier, Japan's Nikkei Stock Average rose 0.3%, Hong Kong's Hang Seng Index added 0.4%, Australia's S&P/ASX 200 added 0.1% and South Korea's Kospi was on track for a fresh record.
The Shanghai Composite rose 0.3%, recovering from earlier losses that sent it to a seven-month low. In China, a note was posted on an official WeChat account run by the state-owned Securities Times, saying the country's stock regulator summoned brokers with large capital pools for a meeting on Monday to ease concerns about a crackdown in the shadow-banking sector.
In currencies, the New Zealand dollar fell sharply against the greenback after a central-bank policy statement was interpreted as dovish. The euro was flat at $1.0871 as the European Union r aised this year's growth forecast for the European economy.
The WSJ Dollar Index, which tracks the dollar against a basket of 16 currencies, was otherwise flat, while 10-year U.S. Treasury yields dipped to 2.394% from 2.414%. Yields move inversely to prices.
Kenan Machado,
Yifan Xie
, Paul Hannon, Georgia Wells and P.R. Venkat contributed to this article.
Write to Riva Gold at riva.gold@wsj.com
(END) Dow Jones Newswires
May 11, 2017 07:50 ET (11:50 GMT)