US open: Stocks lower as investors digest the Fed standing pat on rates

US equity markets were lower on Thursday, as investors digested the Federal Reserve’s policy statement and combed through more earnings.

The Dow Jones Industrial Average fell 0.1% to 19,871.23, the S&P 500 was down 0.09% to 2,277.40 and the Nasdaq was 0.09% weaker to 5,638 at 1539 GMT.

The Fed stood pat on rates on Wednesday and sounded a positive note on the economic outlook.

Markus Huber, a trader at City of London Markets, said: “At this stage it appears that the Fed won't be raising rates during their next meeting in March however an uptick in labour costs combined with strong US non-farm payroll data tomorrow could potentially change this. Overall sentiment remains neutral to slightly negative with traders awaiting tomorrow's US employment data and also keeping a close eye on President Trump for any announcements or Tweets which might move markets.”

On Wednesday, Trump threatened to send US troops to Mexico to keep “bad hombres” from coming into the US, and reportedly had a curt phone call with Australian Prime Minister Malcolm Turnbull over the resettlement of refugees.

Fed chair Janet Yellen will appear before congress on 15 February and the minutes of this week’s meeting will be published on 22 February.

Meanwhile, oil prices largely unchanged, with West Texas Intermediate and Brent crude flat at $53.84 and $56.86 per barrel, respectively.

Gold on the Comex gained 1.13% to $1,222 per troy ounce.

In currency news, the dollar was up 0.87% against the pound to 0.7969, but was down 0.42% versus the euro to 0.9247 and 0.79% weaker against the yen to 112.36.

Michael Hewson, chief market analyst at CMC Markets, said: “The dollar has come under further pressure today after the Fed left rates unchanged last night, falling to its lowest level against the euro since 8 December.

“Gold prices have continued to rise on the back of continued weakness in the US dollar, and last night’s dovish interpretation of yesterday’s Fed statement.

In corporate news, Mead Johnson's shares jumped 23.68%, putting it on track for its best daily gain ever on news that British consumer goods firm Reckitt Benckiser was looking to buy the baby milk group for $16.7bn.

This news also boosted the S&P 500's consumer-staples sector which was gained 0.7% when markets opened.

Philip Morris gained 2.74% on well-received fourth-quarter results, while Facebook was up 0.19% after it reported better-than-expected fourth-quarter earnings late on Wednesday.

Estee Lauder rose 3.64% mixed third-quarter results and Merck was up 2.31% after its fourth-quarter numbers topped analysts’ expectations.

On the downside, Ralph Lauren tumbled 11.41% after news that its chief executive Stefan Larsson stepped after less than two years with a $10m settlement following disagreements with the fashion company's namesake and chairman.

US-listed shares of Deutsche Bank dropped 4.45% after the German lender posted a €1.9bn net loss for the fourth quarter, falling short of expectations as legal costs took their toll.

Amazon and Chipotle Mexican Grill are due to report earnings after the closing bell.

On the data front, initial jobless claims fell 14,000 to 246,000 in the week ended 28 January, a bit below the consensus forecast of 250,00. For the week earlier, claims were revised up to 260,000 from an initial estimate of 259,000. Claims for unemployment benefits have now remained below 300,000 for 100 consecutive weeks.