Indications: U.S. futures turn lower after ECB, data

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By Barbara Kollmeyer & Kate Gibson, MarketWatch

NEW YORK (MarketWatch) -- U.S. stock futures Thursday pointed to a third day of losses on Wall Street as investors sought signs of resolution from Europe on stemming Greece's debt crisis and traders digested mixed U.S. economic data.

But the European Central Bank's meeting in Lisbon, Portugal drew the bulk of attention, with the ECB holding interest rates steady at 1% and ECB President Jean-Claude Trichet holding a news conference.

"Comments so far confirm that the ECB is firmly in neutral mode, with ongoing Greek jitters preventing further tightening measures for now, despite the gradual pick up in inflation pressures," said analysts at Action Economics.

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Reversing mild gains, futures for the Dow Jones Industrial Average were down 60 points at 10,774. Those for the Nasdaq 100 declined 7.8 points to 1,940.5. Futures for the S&P 500 shed 8 points to 1,155.9.

Deadly riots in Greece and a downgrade for Portugal triggered a heavy case of rattled nerves on U.S. markets Wednesday. The Dow Jones Industrial Average fell 59.94 points, or 0.55%, to 10,866.83, its lowest close since March 31. The Nasdaq Composite and S&P 500 also lost ground.

Analysts at UBS pointed out that chaos can offer a good landscape for value. They suggest buying European companies that have over 40% of sales outside of Europe, and are cheaper than global peers. "Sell U.S. companies that sell to Europe and are more expensive than peers," the analysts said.

U.S. jobless claims fell by 7,000 to 440,000 last week, with the report unlikely to change views of the monthly employment report on Friday, with analysts looking for a rise in the range of 189,000 to 200,000.

Separately, the government said U.S. productivity climbed 3.6% in the first quarter.

Later, Federal Reserve Chairman Ben Bernanke is due to speak about supervisory assessment, as other Fed members are due to deliver speeches on the economy.

Companies reporting ahead of the bell included Warner Music Group /quotes/comstock/13*!wmg/quotes/nls/wmg (WMG 7.20, +0.60, +9.09%) , which narrowed its second-quarter loss, but also reported lower sales.

Retailers also began reporting same-store sales figures for April. Among those reporting, Limited Brands /quotes/comstock/13*!ltd/quotes/nls/ltd (LTD 25.27, -1.23, -4.65%) said same-store sales rose 4% in the four weeks ending May 1, while Stage Stores /quotes/comstock/13*!ssi/quotes/nls/ssi (SSI 14.66, +0.04, +0.27%) said same-store sales fell 8.3%. Costco Wholesale Corp.'s /quotes/comstock/15*!cost/quotes/nls/cost (COST 58.56, -1.80, -2.98%) same-store sales rose 11%. See preview on wholesale sales

Alcatel Lucent /quotes/comstock/13*!alu/quotes/nls/alu (ALU 2.71, -0.31, -10.26%) may see pressure after the telecom equipment maker reported a wider loss and lower-than-expected revenue. Shares were down nearly 11% in pre open trade. See full story.

Europe stocks edged higher with battered banks crawling back after a week of selling, but the euro sank to a new 14-month low against the U.S. dollar, on continuing fears that sovereign-debt woes will spread. The euro fell 0.8% to $1.2721. See Europe stocks

Financial markets are pressing officials to take further steps to contain the growing sovereign debt crisis quickly, as the rescue package for Greece has failed to calm the market turmoil. And some have suggested the ECB step in and buy government bonds itself. Moody's on Thursday said there are contagion risks to southern Europe and U.K. banks.

"Whether it does or not, it is becoming clearer by the moment that conventional monetary policy will need to remain extremely loose for a very long time," said Jennifer McKeown, senior European economist at Capital Economics.

"In all, we suspect that the ECB will keep its options open if questioned about government bond purchases later today. And we would not rule out such a move in future - any port in a storm, after all."

U.K. stocks were down slightly of a heavily uncertain general election. There is a strong possibility that the country will see its first hung parliament since 1974 and investors are worried that the country's budget deficit will remain wide. See London stocks

Most Asian stocks and currencies suffered heavy losses on worries about Europe and fears that tightening policies could slow China growth. Japan's Nikkei 225 finished down 3.3% on reopening after a three-day holiday, while China's Shanghai Composite tumbled 4.1% to its lowest finish in more than eight months.

Crude oil futures were trading below $79 a barrel, while gold futures rose $2.3 an ounce.

Barbara Kollmeyer is an editor for MarketWatch in Madrid. Kate Gibson is a reporter for MarketWatch, based in New York.