US open: Dow and S&P edge higher as earnings season shifts up a gear

US stocks edged higher on Monday, as investors digested disappointing Chinese trade data, while the earnings season was set to begin in its earnest.

Just after 15:00 BST in New York, the Dow Jones Industrial Average was up 0.19%, while the S&P 500 and the Nasdaq gained 0.03% and 0.17% respectively.

On Friday, stocks finished higher with the Dow Jones above 18,000 for the first time in almost three weeks. On Monday, there’s little economic data of note other than the Federal budget for March, due at 18:00 BST.

The Chinese trade surplus fell to $3.08bn in March from $60.62bn the previous month, compared to analysts’ estimates of $40.20bn.

Exports declined by 15% in March, below predictions for a 10% gain and following a 48.3% jump in February. Imports dropped 12.7% last month after a 20.5% slide in February, more than the 10% fall expected.

The General Administration of Customs said the decline was due to weak external demand, the slowdown in China’s economic growth and the fall in international commodity prices.

The earnings season, which began last week, clicks into gear on Tuesday with JP Morgan Chase & Co, Wells Fargo & Co and Johnson & Johnson due to report before the bell.

On Monday, Layne Christensen Co and Pep Boys will report after the close.

“The market reaction to the earnings season is typically a reflection of results versus expectations,” said Jasper Lawler, analyst at CMC Markets.

“Expectations have taken a beating leading into the first quarter reporting but this may be a good thing.”

However, Lawler added that lowered corporate expectations meant the market had a better chance to negotiate a potentially difficult earnings season.

“Corporations have proven very adept at lowering guidance in order to beat it,” he said.

“Even if average income does decline amongst top US companies, if lowered expectations are beaten, the market might come through the next couple of months unscathed.”

In company news, Qualcomm Inc climbed 2.30%, after The Wall Street Journal reported that the chip maker was being pressured to consider a breakup to boost its weak share price by activist investor Jana Partners LLC.

Builders FirstSource jumped 60.4% after unveiling plans to buy ProBuild.

The dollar slid against yen, euro and the pound, while gold futures edged 0.02% higher to $1,204.90.

Oil prices rebounded, with West Texas Intermediate gaining 1.6% to $52.46 a barrel, while Brent crude rose 1.3% to $58.64 a barrel.