US open: Stocks mixed as inflation slows

US stocks were mixed on Thursday as inflation unexpectedly slowed in March.

At 1552 BST, the Dow Jones Industrial Average rose 0.4% but the S&P 500 and the Nasdaq dropped 0.03% and 0.12%, respectively.

The US consumer price index rose 0.9% in the year through March, compared to a 1% increase in February and analysts’ forecasts for 1.1% growth, the Labor Department revealed.

On the month, CPI rose 0.1% in March, up slightly from the previous month’s 0.2% fall but lower than the 0.2% gain that was expected.

A rebound in gasoline prices was offset by a drop in the cost of food and a slowdown in medical care and housing costs.

The Federal Reserve, which has a 2% inflation target, is monitoring consumer prices as it determines the timing of its next interest rate hike.

“It was tricky to ascertain investors’ reaction to the CPI reading; initially both the pound and the Dow rose, suggesting the market was happy with the ostensibly hawk-damaging nature of inflation’s relative softness,” said Connor Campbell, financial analyst at Spreadex.

“Yet at the same time the reading is now back out of negative territory, something that may cause a slightly less cautious tone to creep in during the Fed’s statement at the end of the month, explaining why those gains disappeared as the afternoon wore on.”

Other data from the Labor Department showed the number of Americans filing for unemployment benefits unexpectedly fell last week, according to the Labor Department.

US initial jobless claims fell by 13,000 to 253,000 from a downwardly-revised 266,000 the week before, beating expectations for a rise to 270,000.

Pantheon Macroeconomics said: “We'd love to be able to argue convincingly that these data represent hard evidence of a further improvement in labour market conditions, but it's more likely that Easter-related seasonal adjustment problems explain the drop.”

Meanwhile, oil price gained as the International Energy Agency said the global oil glut was set to ease by the end of this year. It also said that any potential agreement to freeze output at the Doha meeting this weekend would have only a limited impact on supplies.

West Texas Intermediate crude rose 0.12% to $41.81 per barrel and Brent increased 0.31% to $44.32 per barrel at 1609 BST.

In company news, Bank of America gained after reporting first quarter revenue that missed expectations.

Wells Fargo was in the red after saying first quarter net income dropped 7.6% from last year’s level to $5.46bn, sending earnings per share down from $1.04 to $0.99

JPMorgan Chase & Co. advanced after it released stronger-than-expected first quarter results that helped to support the sector overall.

Delta Air Lines Inc. rallied after posting first quarter profit that exceeded forecasts.

In currencies, the dollar rose 0.36% against the pound, increased 0.05% against the euro and fell 0.17% versus the yen.