US open: Mixed start to trading following abrupt end to Trump-Kim summit

Wall Street trading began on a mixed note on Thursday after Donald Trump's denuclearisation summit with North Korean leader Kim Jong-un was cut short with no agreement reached.

At 1505 GMT, the Dow Jones Industrial Average was up 0.04% at 25,994.87, while the S&P 500 was 0.16% weaker to 2,787.85 and the Nasdaq traded 0.33% lower at 7,529.37.

The Dow shook off some earlier losses to open nine points higher as news that the Vietnam summit between Trump and Kim Jong-un had ended with no agreement weighed on the mood.

White House press secretary Sarah Sanders said: "No agreement was reached at this time, but their respective teams look forward to meeting in the future."

Meanwhile, Trump said at a press conference in Hanoi that the talks had ended with no deal due to a disagreement over the lifting of sanctions.

"Basically, they wanted the sanctions lifted in their entirety, and we couldn’t do that."

Trump said North Korea was willing to denuclearise a large portion of the areas the US wanted, "but we couldn’t give up all of the sanctions for that".

Lukman Otunuga, research analyst at FXTM, said the chances of a breakthrough deal happening any time soon were unlikely.

"However, Trump and Kim walking away from the negotiating table doesn’t mean bilateral relations between the two have taken a turn for the worse. With the summit ending amicably, this could open the doors for further talks in the future."

Sentiment also took a hit after data released earlier showed Chinese factory activity contracted to a three-year low in February. The official purchasing managers’ index released by Beijing's National Bureau of Statistics fell to 49.2 in February from 49.5 the month before, missing expectations for it to remain unchanged.

In corporate news, shares in auction house Sotheby's were up 2.27% at the bell after it posted better-than-expected fourth-quarter profit and revenue.

JC Penney surged 26.6% at the open after the department store chain's fourth-quarter earnings per share topped analysts' expectations.

Elsewhere, SeaWorld moved 8.55% firmer at the bell after it reported a narrower-than-forecast loss for the fourth quarter and better-than-expected revenue.

Victoria's Secret parent L Brands was 6.09% lower in early trade after the release of its quarterly earnings.

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

US initial jobless claims increased by 8,000 from the previous week's revised level to 225,000, versus expectations for a level of 220,000. The previous week's figure was revised up by 1,000.

Elsewhere, the US economic expansion ebbed at the tail-end of 2018, albeit by less than had been anticipated, as the pace of inventory accumulation and spending by households and the federal government slowed while state and local governments retrenched.

According to a first estimate by the Department of Commerce, the rate of growth in America's gross domestic product slowed from the annualised 3.6% clip observed over the third quarter to 2.6% for the three months to December.

Economists had forecast growth of 2.3%.

Commenting on the GDP data, Paul Ashworth, chief US economist at Capital Economics, pointed out that solid growth in real disposable personal incomes presaged another "strong" showing for consumption in the first quarter of 2019 and that the start of the partial federal government shutdown may have impacted on public spending.

"As the [fiscal] stimulus fades and the lagged impact of past monetary tightening continues to feed through, we expect GDP growth to slow to 2.2% this year and only 1.2% in 2020.

"Under those circumstances, we don’t expect the Fed to hike rates again and we anticipate 75bp of rate cuts in 2020."

Lastly, the Chicago PMI surged 8 points to 64.7 in February, according to MNI Indicators.

The jump marked the single largest monthly rise since February 2017.

MNI senior economist Shaily Mittal said: "The sharp pick-up in the barometer to a level not seen in over a year, underpinned by the growth in demand and production, showcases a healthy image of the US economy."