US open: Dow opens higher as investors digest latest news on Sino-US relations

Wall Street trading began on a mixed note on Thursday as investors digested the latest news on Sino-US relations and looked to the start of the first-quarter earnings season.

At 1525 BST, the Dow Jones Industrial Average was up 0.19% at 26,206.20 and the S&P 500 was trading 0.12% firmer at 2,891.77. The Nasdaq Composite, on the other hand, was down 0.10% at 7,956.49.

The Dow opened 49 points higher on Thursday as market participants continued to mull over the release of the latest minutes from the Federal Reserve on Wednesday.

David Cheetham, chief market analyst at XTB, said the minutes were "mildly pleasing" for stocks, with rate-setters showing little inclination to resume their hiking cycle anytime soon while also hinting at the possibility of rate cuts.

"To summarise, these events weren't spectacular by any means but they do both serve to reaffirm the notion that the end of accommodative policy from the world’s leading central banks may have been exaggerated and while this remains the case then the year-to-date rally for stocks looks well supported in the near term," he said.

Trade relations between the US and China were in focus again as well, as US Treasury Secretary Steven Mnuchin said the two nations have agreed on an enforcement mechanism for their potential trade deal.

"We've pretty much agreed on an enforcement mechanism," Mnuchin said in an interview with CNBC. "We’ve agreed that both sides will establish enforcement offices that will deal with the ongoing matters. This is something both sides are taking very seriously."

Meanwhile, the Wall Street Journal reported that China has agreed to open its cloud-computing sector to foreign companies in a bid to sweeten a trade deal with the US.

Joshua Mahony, senior market analyst at IG, said: "One of the key hurdles to completing the US-China trade negotiations has been overcome according to Treasury Secretary Steven Mnuchin.

"With the bulk of the trade negotiations across the line, the focus has been on those final issues, such as the protection of intellectual property, and quite how the deal would be enforced. With both sides planning to set up enforcement offices to ensure that the terms are adhered to, negotiations are clearly moving closer to a breakthrough that could provide a substantial boost for markets and the yuan."

Events across the pond were also garnering some attention after the EU agreed to give the UK a Brexit extension running to 31 October, with a progress review in June.

On the macroeconomic front, wholesale prices bounded past forecasts last month, but a closer look at the figures revealed the core measures of inflation were pointing to some softness ahead, some analysts said.

According to the Department of Labor, the US producer price index for final demand climbed at a 0.6% month-on-month clip in March, lifting the year-on-year rate of advance from 1.9% for February to 2.2% in March (consensus: 1.9%).

But it was the most volatile components that drove the increase, with gasoline prices jumping by 5.6%, alongside a rise of 1.1% in those for trade services and a 0.3% increase in food costs.

The 'core' PPI measure that excludes those components was, in fact, flat versus the previous month, so that the annual rate slowed from 2.3% to 2.0% - its slowest pace since August 2017.

Elsewhere, the number of Americans filing for unemployment benefits unexpectedly fell last week, to a near 50-year low, according to data from the Labor Department.

US initial jobless claims declined by 8,000 from the previous week's revised level to 196,000, beating expectations for an increase to 211,000 and marking the lowest level since 4 October 1969. The previous week's level was revised up by 2,000 to 204,000.

Meanwhile, the four-week moving average came in at 207,000, down 7,000 from the previous week's average, which was revised up by 500. This was the lowest level for this average since 6 December 1969.

Barclays said the data continues to point to healthy labour market conditions and extraordinarily low rates of job separation.

"The reading of 196k represents a recovery-level low and the lowest reading on initial jobless claims since the late 1960s," said Barclays.

"However, when taken as a share of employment, initial jobless claims have been at all-time lows for several years and reflect unusually low rates of job separations (total payroll employment in private industry was about 56m in 1968 and stands at 128m presently)."

In corporate news, Tesla was down 2.42% after reports surfaced that the electric carmaker and Panasonic were scrapping plans to expand a gigafactory, while IBM inched ahead 0.31% after analysts at Credit Suisse initiated coverage on the tech giant at 'outperform'.

The start off the first-quarter earnings season on Friday, JPMorgan Chase and Wells Fargo will both post results.