US close: Wal-Mart and Apple lead modest rebound

US stocks rebounded on Thursday, as Wal-Mart and Apple gained and combined with economic data to boost the mood.

Following the worst trading day in over seven months amid impeachment calls for President Donald Trump, the Dow Jones Industrials Average bounced back modestly with a 0.27% gain to 20,663.02, while the S&P 500 climbed 0.37% to 2,365.72, alongside a 0.73% improvement for the Nasdaq composite.

"Such a bounceback was eminently predictable, especially since there have been no further developments in Trumpland," said IG's chief market analyst Chris Beauchamp, though news titbits continued to emerge around Trump's sacking of FBI chief James Comey as he was investigating possible links between the billionaire property developer and Russia in the run up to last year's election.

"The rally is small, and in no way really changes the bearish picture that was created yesterday – once options expiry and the weekend is out of the way there is a high probability that the selling will resume," Beauchamp said.

"Longer-term, this is still a dip, and one that will be bought in due course, but there seems to be an awful lot more downside to come. The bottom line is that faith in the Trump rally has been shaken, if not yet quite destroyed, and it is unlikely to return any time soon."

The dollar gained against the euro and recouped early losses against the pound thanks to better than expected jobless claims and comments from Cleveland Fed president Loretta Mester, who reiterated her argument that the Federal Open Market Committee needs to keep raising interest rates this year if economic conditions continue on their current pace.

"I think that it’s important for the FOMC to remain very vigilant against falling behind, especially given the low level of interest rates and the large size of our balance sheet," Mester said, adding that the rate-setting committee should raise rates more than once this year.

Initial weekly US unemployment claims decreased by 4,000 during the latest reference week to reach 232,000 (consensus: 240,000).

Ian Shepherdson, chief US economist at Pantheon Macroeconomics, said the third consecutive week of initial claims below 240,000 was "noteworthy".

It chimed with his expectation that non-farm payrolls would expand at a greater than 200,000 person clip, on average, over the next few months.

Meanwhile, the Philly Fed's manufacturing index gauge jumped from a reading of 22.0 in April to 38.8 for May (consensus: 18.8).

Retail heavyweight Wal-Mart led the Dow on the back of a solid set of first quarter numbers. Like-for-like sales were up 1.4%, their 11th consecutive rise.

Apple was also back on the front foot, having seen $27bnn of its valuation temporarily evaporate during the previous day's steep sell-off.

Cisco led fallers even though third-quarter earnings beat Wall Street estimates, as it saw a "significant slowdown in the US public sector…due to the uncertainty in budgets". The enterprise tech firm vowed to axe a further 1,100 staff as part of its restructuring plan that has already identified 5,500 job cuts.

Ascena Retail, the owner of retail brands Ann Taylor, Justice and DressBarn, plummeted after the firm issued a profit warning.

Stock in Ralph Lauren was moving lower even after the company reported much better-than-expected first quarter earnings per share of 89 cents, versus the analyst consensus calling for 78 cents.

Dow Jones - Risers

Wal-Mart Stores Inc. (WMT) $77.54 3.22%
Unitedhealth Group Inc. (UNH) $171.45 1.53%
Apple Inc. (AAPL) $152.54 1.52%
Merck & Co. Inc. (MRK) $63.89 1.41%
Verizon Communications Inc. (VZ) $45.04 1.26%
Goldman Sachs Group Inc. (GS) $215.16 0.67%
E.I. du Pont de Nemours and Co. (DD) $77.04 0.63%
Travelers Company Inc. (TRV) $120.88 0.52%
Intel Corp. (INTC) $35.22 0.51%
Chevron Corp. (CVX) $105.17 0.45%

Dow Jones - Fallers

Cisco Systems Inc. (CSCO) $31.38 -7.21%
Boeing Co. (BA) $177.40 -0.77%
Procter & Gamble Co. (PG) $85.87 -0.45%
JP Morgan Chase & Co. (JPM) $83.96 -0.37%
Coca-Cola Co. (KO) $43.79 -0.30%
Exxon Mobil Corp. (XOM) $81.75 -0.29%
Home Depot Inc. (HD) $155.70 -0.25%
Nike Inc. (NKE) $51.66 -0.23%
United Technologies Corp. (UTX) $119.37 -0.18%
International Business Machines Corp. (IBM) $150.78 -0.10%