Euro sags as ECB keeps stimulus; Facebook lifts US stocks

John BIERS
ECB president Mario Draghi warned of protectionist threats but elected to keep economic stimulus in place for now and keep ultra-low rates where they are

The euro sagged Thursday as the ECB kept in place aggressive easy money policies, while blowout earnings from Facebook lifted tech shares and broader US equity indices.

As expected, the European Central Bank made no changes to its ultra-low interest rates and its bond-buying stimulus program, which is slated to end in March.

Despite recent signs of weakness in the European economy, the data for now remain "consistent with a solid and broad-based expansion," said ECB chief Mario Draghi.

Yet Draghi also warned Thursday of the potential fallout from a global trade war, citing various simmering spats in the wake of protectionist moves by US President Donald Trump.

"We don't know the extent of the retaliation yet" or the impact of possible trade wars, Draghi said, while adding that heated rhetoric could already be having a "profound" effect on business confidence, indirectly undermining growth.

For now, "ample" central bank support remains necessary, he insisted, reiterating his mantra of "patience, prudence and persistence."

Draghi's cautious comments sparked a sell-off in the euro, which slumped 0.6 percent against the dollar to hit $1.209.

The lower euro helped eurozone equity markets pick up. Frankfurt finished the day with a gain of 0.6 percent and Paris also rose 0.6 percent. Outside the eurozone, London rose 0.5 percent.

- Facebook surges -

In the US, the tech-rich Nasdaq Composite Index led major US indices, jumping 1.6 percent.

Investors cheered Facebook after the social media giant reported a 63 percent rise in first-quarter profits to $5 billion, undented by a consumer data scandal, lifting shares by 9.1 percent.

"With a compelling Capitol Hill performance by CEO Mark Zuckerberg and these strong results, we think that for the time being, the worst is very likely behind Facebook stock," said Canaccord Genuity analyst Michael Graham.

Besides Facebook, Amazon, Google parent Alphabet and Microsoft all won about two percent or more.

But American Airlines sank 6.4 percent as it reported a 45.2 percent drop in first-quarter earnings to $186 million and highlighted higher fuel costs as a worry.

Another big US carrier, Southwest Airlines, fell 1.0 percent as it warned of a slowdown in bookings following a problem flight last week that resulted in an emergency landing and fatality.

Shares in British bank Barclays shed 1.4 percent after revealing that it had dived to a first-quarter net loss following a huge US fine over its conduct in the run-up to the global financial crisis.

Germany's Deutsche Bank slid 1.3 percent in Frankfurt after reporting falling profits for the first quarter and announcing deep cuts to its flagship investment banking division.

But auto behemoth Volkswagen revved 2.6 percent higher despite a drop in quarterly net profits, saying strong sales had got 2018 off to "a good start".

- Key figures around 2100 GMT -

New York - Dow: UP 1.0 percent at 24,322.34 (close)

New York - S&P 500: UP 1.0 percent at 2,666.94 (close)

New York - Nasdaq: UP 1.6 percent at 7,118.68 (close)

London - FTSE 100: UP 0.6 percent at 7,421.43 (close)

Frankfurt - DAX 30: UP 0.6 percent at 12,500.47 (close)

Paris - CAC 40: UP 0.7 percent at 5,453.58 (close)

EURO STOXX 50: UP 0.6 percent at 3,506.86 (close)

Tokyo - Nikkei 225: UP 0.5 percent at 22,319.61 (close)

Hong Kong - Hang Seng: DOWN 1.1 percent at 30,007.68 (close)

Shanghai - Composite: DOWN 1.4 percent at 3,075.03 (close)

Euro/dollar: DOWN at $1.2104 from $1.2161 at 2100 GMT

Dollar/yen: DOWN at 109.34 yen from 109.43

Pound/dollar: DOWN at $1.3918 from $1.3932

Oil - Brent North Sea: UP 74 cents at $74.74 per barrel

Oil - West Texas Intermediate: UP 14 cents at $68.19 per barrel

burs-jmb/dg