Stocks Close Lower as Apple Weighs

Tech shares dragged down U.S. stocks Thursday, while global markets largely shook off inaction by the European Central Bank.

The stock market has been calm this summer -- the S&P 500 hasn't had a daily move of more than 1% in two months. With earnings season wrapping up, investors are focusing on economic data and comments from central bankers.

The Dow Jones Industrial Average fell 44 points, or 0.2%, to 18482. The S&P 500 declined 0.2% and the Nasdaq Composite lost 0.4%.

Tech shares led declines in the U.S. Apple fell 2.5% a day after it unveiled its latest iPhones, while Hewlett Packard Enterprise lost 3.1% after it disclosed on Wednesday a deal to spin off and merge most of its software operations with Micro Focus International. Shares of Micro Focus rose 15% in London.

Energy companies jumped as U.S. crude oil rose 4.6% to $47.61 a barrel. U.S. crude oil stockpiles fell sharply last week, according to the Energy Information Administration.

European stocks and government bonds sold off after the ECB declined to further ease monetary policy Thursday, but the overall market reaction was muted. The euro, which is highly sensitive to ECB action, pared gains against the U.S. dollar to trade in a relatively narrow range throughout the day.

The subdued response from investors stands in contrast to some prior ECB moves. The euro jumped and stock markets tumbled last December when the ECB announced a smaller-than-expected package of easing measures.

ECB officials have learned their lesson and "want to make sure the market doesn't run ahead of itself in terms of expectations," said Cosimo Marasciulo, head of European government bonds at Pioneer Investments.

The ECB earlier Thursday kept interest rates unchanged and said it would maintain asset purchases of EUR80 billion ($90 billion) a month until the end of March 2017, or beyond if necessary.

Many economists had expected the ECB to stand pat on policy, but were looking for hints of an extension to the bank's quantitative-easing bond-buying program.

The ECB is still far from hitting its primary goal of raising inflation to just below 2%, a target it has missed for more than three years. That has spurred market expectations that the bank will unleash further stimulus.

Yet ECB President Mario Draghi said officials hadn't discussed extending QE at its meeting this week.

The biggest initial reaction came in European stocks, as Mr. Draghi said the ECB hadn't discussed buying shares under its QE program. The Stoxx Europe 600 slipped more than 1% while Mr. Draghi spoke, but later recovered to close down 0.3%.

The euro pared gains and was recently up 0.1% against the dollar at $1.1255.

The euro tends to weaken on expectations of aggressive monetary easing from the ECB. Meanwhile, bond yields tend to fall and stock markets gain when traders think the central bank will be buying more assets over time.

The yield on 10-year German government bonds edged up to around minus-0.06%, according to Tradeweb. The yield on the 10-year Treasury note rose to 1.616% from 1.539% Wednesday. Yields rise as prices fall.

"The intraday price action in bond markets suggests some people may have expected more today," said Andrew Bosomworth, a portfolio manager at Pacific Investment Management Co.

Still, Mr. Bosomworth said Mr. Draghi sent a signal that the ECB would extend its asset purchases beyond next March, highlighting the ECB president's comments emphasizing inflation remaining too low and the central bank standing ready to act if needed.

"He just did it in a very subtle and indirect way," said Mr. Bosomworth, who expects the ECB to announce in December an extension to its QE program of six to nine months.

The ECB is the first of four major central banks set to meet this month, including the Federal Reserve, the Bank of Japan and the Bank of England.

The absence of major policy moves from Europe are an encouraging sign for the case to raise U.S. interest rates, said Ian Winer, head of equities trading at Wedbush Securities. "A stronger dollar is what scares the Fed the most," he said.

The WSJ Dollar Index, which measures the dollar against a basket of 16 currencies, was recently up 0.2%. The index is down roughly 5% so far this year.

Earlier, Japan's Nikkei Stock Average fell 0.3%. Shares in Shanghai and Hong Kong rose, however, as investors eyed fresh trade data. China's exports continued to fall in dollar terms in August compared with a year earlier, but at a slower pace, and came in above expectations.