US open: Stocks rise as dollar takes a beating from the euro on Draghi comments

US stocks advanced in early trade on Thursday as investors sifted through a raft of corporate earnings, with eyes on Davos and forex markets as comments by European Central Bank chief Mario Draghi boosted the euro.

At 1525 GMT, the Dow Jones Industrial Average was up 0.4% at 26,367.66, while the S&P and the Nasdaq were 0.2% firmer at 2,841.87 and 7,426.83, respectively.

The European Central Bank left interest rates and its forward guidance on policy unaltered earlier, pledging to keep its asset purchases running until inflationary pressures pick up. The ECB made no change in terms of language or guidance, holding back from recent indications that it was preparing to tweak up the pace of policy tightening after the euro's recent surge to a three-year high.

The key refinancing rate was left unchanged at 0.00%, as economists expected, as were the deposit facility rate, marginal lending facility rate and asset purchase target at -0.4%, 0.25% and €30bn respectively.

The euro continued its move higher against the greenback, pushing past $1.25 after Draghi pointed to growing confidence that inflation will reach its 2% target and as he appeared more relaxed about the currency’s recent appreciation than many market participants expected.

The greenback also continued to take a kicking from the pound, which rose 0.4% to 1.4303, extending gains from the previous session.

With the ECB announcement out of the way, investors will be looking to the World Economic Forum in Davos.

Oanda analyst Craig Erlam said: “The World Economic Forum will undoubtedly grab investors’ attention, with some of the world’s most important politicians and business leaders in attendance and making speeches. Naturally, it’s US President Donald Trump’s speech on Friday that is most hotly anticipated given growing concerns globally about protectionism, with many other leaders having warned against it already at the event.”

In corporate news, defence group Northrop Grumman rose after it posted better-than-expected quarterly sales and lifted its dividend while Biogen edged higher after its fourth-quarter revenues and guidance for 2018 surpassed expectations.

Kroger gained following reports that it and Chinese e-commerce company Alibaba have had early talks about working together, while 3M was on the front foot as investors welcomed better-than-expected fourth-quarter numbers and an upbeat outlook for this year.

On the downside, Southwest Airlines flew lower despite its fourth-quarter profit coming ahead of forecasts, while Union Pacific retreated after its fourth-quarter earnings per share came in just light of expectations.

Caterpillar fell back despite the heavy duty equipment maker’s quarterly profit beating forecasts again and Newell Brands tumbled as the consumer goods company said it’s exploring some strategic options that could cut its customer base by half.

Freeport McMoran declined despite a fourth-quarter earnings beat.

Figures out earlier from the Labor Department showed the number of Americans filing for unemployment benefits rose last week. US initial jobless claims increased by 17,000 from the previous week’s revised average to 233,000 versus economists’ expectations for an increase to 240,000 .The previous week’s average was revised down by 4,000 to 216,000.

Meanwhile, the four-week moving average fell by 3,500 from the previous week’s average, which was revised down by 1,000 from by 244,500.

Elsewhere, figures from the Commerce Department showed that US new home sales fell in December compared to the previous month. Purchases of newly built single-family homes fell by 9.3% to a seasonally-adjusted annual rate of 625,000, below the 679,000 expected.