US open: Dow breaks through 25,500 mark, Nasdaq dragged down by Facebook

US stocks kicked Thursday's session off mostly lower as investors weighed up a disappointing set of earnings from Facebook against a breakthrough in talks between Donald Trump and EU Commission President Jean-Claude Juncker.

At 1540 BST, the Dow Jones Industrial Average was up 0.50% to 25,540.88, while the S&P 500 was 0.24% lower at 2,839.24. The tech-heavy Nasdaq was the standout loser, down 0.91% to 7,859.82 as Facebook suffered its biggest ever one-day loss following disappointing results.

Commenting on the Dow's gains, Spreadex analyst Connor Campbell said the fact is crossed 25,550 for the first time since the end of February shows "the extent to which trade concerns have gripped the markets that a relatively substance-less announcement from Donald Trump and Jean-Claude Juncker has been greeted with such joy, investors just thankful that the US President was more diplomatic in person than he is on Twitter".

The US-EU meeting in Washington on Wednesday yielded some progress as the US agreed to work towards lowering trade barriers with the EU. The two sides said they would work towards zero tariffs, zero non-tariff barriers and zero subsidies on non-auto goods. In addition, they agreed to up trade in services and agriculture, which includes greater US soybean exports to the EU.

"The Dow was lucky Facebook isn't one of the index’s illustrious 30 constituents. The controversial social media giant went into meltdown after the bell, shedding nearly a fifth of its value as investors unfriended the firm in droves," Campbell added.

Facebook shares slid 18.84% in early trading after the social media giant cautioned late on Wednesday that revenue will keep decelerating in the second half of 2018. The company also fell short of expectations on revenues and user growth for the second quarter.

David Cheetham, chief market analyst at XTB, said the results themselves didn't appear too bad on first glance, with a 42% rise in revenue for the second quarter to $13.23bn only narrowly missing estimates of $13.36bn, although this did represent the first miss for this metric since 2015.

"The chief cause of the concern is the firm’s prospects going forward with only 22 million new daily active users worldwide in Q2, which represents the lowest quarter-on-quarter jump since at least early 2011," he added.

Elsewhere, Allergan ticked up 0.17% after the company reported a smaller second-quarter loss and announced a $2bn buyback programme.

Supervalu surged 64% at the open after agreeing to be bought by United Natural Foods for $32.50 a share in cash, or around $2.9bn.

Bristol-Myers Squibb gained 0.80% after posting a better-than-expected second-quarter profit and revenue, while Under Armour rose 2.8% after its second-quarter revenue beat estimates.

Xerox shares gained 3.43% at the open despite posting a lower-than-expected quarterly profit as costs related to its failed deal with Fujifilm Holdings rose.

Comcast was up 3.55% on the back of stronger-than-expected second-quarter profit, while Advanced Micro Devices surged 9.88% following solid second-quarter earnings.

Still to come, earnings are due from Amazon, Intel, Starbucks, Expedia and Chipotle Mexican Grill, among others.

On the macro front, figures from the Labor Department showed the number of Americans filing for unemployment benefits rose more than expected last week.

US initial jobless claims were up 9,000 to 217,000 from the previous week's level, which was revised up by 1,000. Economists had been expecting a smaller increase to 215,000.

Meanwhile, the four-week moving average came in at 218,000, down 2,750 from the previous week's level, which was revised up by 250.

In other data, the US goods trade deficit for June came in at $68.3bn, worse than the expected $67.0bn.

Exports of goods for June were $141.9bn, $2.2bn less than a month earlier, while imports came to $210.3bn, a $1.3bn month-on-month increase.

Wholesale inventories for June came in at 0% versus an expected 0.03%, while May's figure was revised to 0.4% from 0.6%.