US open: Dow slides on the back of disappointing trade data

US stocks slid early Tuesday after disappointing trade data showed the US deficit had grown more than expected.

Just after 15:40 BST, the Dow Jones Industrial Average was down 34 points, while the S&P 500 was down 7 and the Nasdaq 40 points.

America’s trade deficit with the rest of the world widened unexpectedly in March, according to a preliminary estimate from the US Department of Commerce.

The gap between exports and imports of goods and services yawned wider to reach $51.4bn – a six year high – as the shutdown at ports on the US west coast ended, leading to the release of the mountain of imports which had been pent-up.

Ahead of Friday’s nonfarm-payrolls report, data throughout the week could shed light over the timing of the first rate hike by the Federal Reserve.

“If the economic recovery is as strong as the Fed would have us believe, the improvement in the data should be substantial with the backlog in spending and hiring being carried through into the second quarter,” said Oanda’s senior market analyst Craig Erlam.

“Friday’s jobs report is the big one though and it’s likely to be the one that alters people’s rate hike expectations more so than any other.

“Strong job creation and earnings growth would surely put the focus on September for the first rate hike.”

In company news, the earnings season continues with Groupon, Walt Disney and Herbalife set to report after the bell.

Cloud security group Qualys plunged 25.2% after delivering a disappointing outlook late on Monday, while Office Depot slid 0.11% after it first quarter sales missed estimates.

Archer Daniels Midland Company shed 0.22% after the food processing group sales fell below forecasts, although it beat profit expectations.

Chinese-language Internet search provider Baidu declined 1.91% after analysts at JP Morgan cut their target price on the stock from $240 to $215, while media and tech group AOL after analysts at Goldman Sachs downgraded their rating on the stock to 'sell' from 'neutral'.

Netflix gained 2.49% after analysts at Bank of America Merrill Lynch upgraded their rating on the stock to ‘buy’.

The dollar climbed 0.31% and 0.19% against the pound and the yen respectively and was largely flat against the euro, while gold futures edged forward 0.71% to $1,195.40.

Both oil benchmarks jumped from the lull in Asian trading on Tuesday following Saudi Arabia’s decision to raise its asking price for crude oil exports to Europe and North America.

West Texas Intermediate was up 2.9% to $60.69 a barrel, while Brent crude gained 2.4% to $68.10 a barrel.