US open: Stocks make modest gains as earnings season continues

As earnings season continues, there were modest gains on Wall Street on Thursday following a slump in oil prices in the previous session.

At 1539 BST, Dow Jones Industrial Average was up 0.35% to 20,475.69, the S&P 500 rose 0.26% to 2,344.28, and the Nasdaq added 0.34% to 5,882.81.

Meanwhile, oil prices were little changed after heavy losses on Wednesday after data showed an unexpected 1.5m barrel build in gasoline stocks last week.

West Texas Intermediate and Brent crude were flat at $50.84 and $52.97 per barrel, respectively.

Earlier, Saudi Arabia’s energy minister Khalid al-Falih said that Opec is likely to agree to extend production cuts into the second half of 2017 at the cartel’s next meeting on 25 May.

Jasper Lawler, senior market analyst at London Capital Group, said that with US output rising, Opec had not quite done enough to reduce the supply-glut and he expects the extension to go ahead.

In currency markets, the dollar fell 0.42% against the euro to 0.9297 after the single currency hit a three-week high on a poll that showed that centrist Emmanuel Macron would likely win the French presidential election.

Against the pound the greenback fell 0.28% to 0.7804 and versus the yen it rose 0.48% to 109.38.

Market participants were also keeping an eye on events in Washington and a possible government shutdown.

Lawler said: “Investors remain concerned that Donald Trump’s tax and spending plans are getting derailed by foreign affairs. House speaker Paul Ryan saying he sees a long battle over tax reform is a reality many ‘reflation’-inspired investors are loathe to face up to.”

On the data front, the number of Americans claiming unemployment checks fell to 17-year low in April, suggesting that the labour market is tightening.

Initial jobless claims increased 10,000 to 244,000 for the week ended 1 April.

The number of new applicants for unemployment benefits registered less than 300,000 for 111 straight weeks. Continuing jobless claims fell by 49,000 to 19.98m.

Meanwhile, the Philadelphia Fed manufacturing index fell to 22.0 in April from 32.8 the month earlier and lower than the 25.5 reading expected.

On the corporate front, Philip Morris International fell 3.13% after the tobacco company missed first quarter earnings and profit forecasts, while Blackstone Group was 1.23% higher after beating first quarter profit expectations.

Travelers fell 1.84% after the company boosted its dividend but reported a 12% fall in first quarter profit.

Ebay was down 3.5% after its first-quarter profit and revenue rose but the company said second-quarter profit will be below expectations.

Foot Locker dropped 4.23% after the company cut its full-year earnings per share growth outlook to mid-single digits from double-digit.

Chip designer Qualcomm shaved off 1.63% despite its second-quarter earnings late on Wednesday beating analysts' estimates.

PPG Industries rose 0.9% after its earnings and revenue beat estimates, while Verizon Communications was 1.71% weaker after posting disappointing first-quarter earnings.

After the close, numbers are due from Visa and Mattel.