US open: Dow falls almost 50 points as Wednesday's rally fades

US equities struggled for direction early on Thursday, as Wall Street failed to build on the previous session’s rally, even though Asian markets boosted sentiment.

Just before 1500 BST, the Dow Jones Industrial Average was down 48 points to 17,353.90, while the S&P 500 shed just over a point and the Nasdaq was six points higher.

The S&P 500 rallied on Wednesday, notching its biggest one-day comeback in four years to finish up 0.1% as US equities reversed earlier losses driven by China’s decision to devalue the yuan for a second consecutive day.

China boosts Asian stocks

The majority of Asian stocks edged higher on Thursday, although China guided its currency lower for the third day straight on Thursday, as Chinese central bank officials defended their policy.

“The fact that the Beijing authorities had to do three supposedly one-off interventions to prove to the world that its economy isn’t heading for a hard landing says it all,” said David Madden, market analyst at IG.

“We won’t see the fruits of China’s labour for many months, but the devaluing of the yuan indicates it means business.”

Elsewhere, European stocks rose, while the dollar was broadly flat against the pound but gained 0.19% and 0.39% against the yen and the euro respectively.

Gold futures slid 0.60% to $1,116.90, while oil prices advanced at a sedate pace, with West Texas Intermediate gaining 0.23% to $43.40 a barrel and Brent rising 1.06% to $50.19 a barrel.

Thursday data

US retail sales rose 0.6% in July from May, according to data released by the US Commerce Department, beating expectations of a 0.5% increase.

The figures for May, meanwhile, were revised up from a 0.3% fall to flat.

"Upward revisions to sales in April and May mean that real consumption growth started the third quarter on a stronger footing than we previously believed," said Paul Ashworth, chief US economist at Capital Economics.

"If the renewed decline in energy prices is sustained, then it is possible that third-quarter real consumption growth will end up being even stronger."

Meanwhile, figures released by the Labor Department on Thursday showed initial jobless claims rose by 5,000 to 274,000 in the week to 8 August, compared with analysts’ expectations for a 270,000 reading.

The average of new claims over the past month ticked down by 1,750 to a seasonally-adjusted 266,650, its lowest level since April 2000.

In company news, GoPro rose 3.85% after Cowen & Co initiated coverage on the stock with an 'outperform' rating and $76 target price.

Alibaba advanced 0.93%, even though analysts at Raymond James and RBC Capital cut their target prices on the e-commerce giant from $109 to $87 and from $105 to $91, respectively.

The earnings season continues, with Advance Auto Parts and Kohl’s set to report ahead of the opening bell, while Applied Materials, Weibo, Nordstrom and El Pollo Loco Holdings are among the companies on tap after the close.