US open: Stocks fall after PPI, jobless claims

US stocks fell in early trade on Thursday as investors mulled the latest inflation and jobless claims data.

At 1550 BST, the Dow Jones Industrial Average was down 1%, the S&P 500 was 0.5% lower and the Nasdaq was off 0.2%.

Earlier, data from the Bureau of Labor Statistics showed that US producer prices rose at their slowest pace in April since January 2021.

The producer price index for final demand rose 2.3% on the year. Month-on-month, the index was up 0.2%, after falling 0.4% between February and March.

Core wholesale inflation - which excludes volatile food and energy prices - rose 0.2% from March and 3.2% on the year in April.

Separate data form the Labor Department showed that the number of Americans filing for unemployment benefits rose more than expected last week.

US initial jobless claims increased by 22,000 from the previous week’s unrevised level to 264,000. This was above expectations for a jump to 245,000 and marked the highest level since 30 October 2021, when it was 264,000.

Meanwhile, the four-week moving average came in at 245,250, up 6,000 from the previous week’s unrevised average. This is the highest level for this average since 20 November 2021 when it was 249,250.

The four-week average is considered more reliable as it smooths out sharp fluctuations in the more volatile weekly figures, giving a more accurate picture of the health of the labour market.

Oxford Economics said: "While the April jobs data surprised to the strong side, the latest jobless claims data are consistent with loosening labor market conditions.

"It's just one week of data, but the increase in claims last week pushed the four-week moving average for claims to the highest level since November 2021. Evidence of cooling demand for labour will allow the FOMC to refrain from raising rates at the June meeting."

On the corporate front, Disney shares fell nearly 8% after its second-quarter results revealed a drop in subscriber numbers.

Russ Mould, investment director at AJ Bell, said: "One of the biggest gripes investors have had with the company is the fact its Disney+ streaming platform has been losing large amounts of money.

"News that the platform reduced its operating losses from $1.1 billion to $659 million quarter-on-quarter should have been seen as significant progress towards its goal of making Disney+ profitable. However, the market seems to have been fixated by the 4 million reduction in subscriber numbers.

"Given that most of the subscriber exits can be attributed to showing fewer Indian cricket matches, it hardly seems to be a disaster as it still has more than 231 million subscribers across its three platforms which includes ESPN+ and Hulu."