US open: Stocks mixed as investors await Powell's second testimony this week

Wall Street trading opened on a mixed note on Thursday as investors sifted through a slew of economic data while awaiting new Fed Chair Jerome Powell’s second testimony this week.

At 1500 GMT, the Dow Jones Industrial Average was up 0.22%, while the S&P 500 and Nasdaq gained 0.26% and 0.12%, respectively.

Investors have been on edge since Tuesday when a hawkish first congressional testimony by Powell spooked markets by adding weight to expectations of four rate hikes rather than three this year.

Oanda analyst Craig Erlam said: "Powell’s testimony in front of the House Financial Services Committee on Tuesday was very bullish on the economy and led many to believe that a fourth-rate hike is on the table this year. While this isn’t a million miles from what markets are pricing in, it did trigger another negative response from markets with US indices falling around two and a half percent since and positioned for further losses today.

"It would appear markets are bracing for more hawkish commentary from Powell today when he appears before the Senate Banking Committee, once again discussing the semi-annual monetary policy report. Given everything that he said on Tuesday, it seems pretty clear that economic forecasts will be revised higher this month and the pace of tightening will likely, therefore, pick up, which may make today’s less eventful as he reiterates many of the views already expressed. That said, should he wish to backpedal on anything or clarify points that have been misinterpreted, it may attract some attention."

In economic news, personal income and spending printed ahead of forecasts at the start of the year, alongside a hefty 0.9% jump in disposable incomes as recently approved tax cuts kicked-in, according to figures from the Department of Commerce.

Despite that, key inflation gauges contained within the same report - including the Federal Reserve's preferred inflation index - came in just as expected, rising at the same clip as in December.

At the headline level, the year-on-year rate of gain on the price deflator for personal consumption expenditures held at 1.7%, while at the 'core' level, excluding food and energy, the PCE price index came in at 1.5%.

Meanwhile, personal income and spending rose by 0.4% and 0.2% month-on-month, respectively, which was ahead of economists' forecasts for a reading of 0.2% for both measures.

Elsewhere, the number of Americans filing for unemployment benefits hit its lowest level in 49 years last week, according to data from the Labor Department.

US initial jobless claims declined by 10,000 to 210,000 from the previous week’s level, which was revised down by 2,000. Economists had been expecting claims of 226,000. This marked the lowest level of claims since 6 December 1969, when it was 202,000.

The manufacturing sector was also in focus following releases from the Institute for Supply Management and IHS Markit.

IHS Markit’s final manufacturing purchasing managers’ index slipped to 55.3 from January’s 34-month high of 55.5, but data from the ISM showed growth in the manufacturing sector unexpectedly rose in February, to its strongest rate in almost 14 years.

The ISM’s headline manufacturing index increased to 60.8 from 59.1 in January, beating expectations for a drop to 58.7.

A reading above 50 indicates expansion, while a reading below signals contraction.

Timothy R. Fiore, chair of the ISM, said: "This indicates growth in manufacturing for the 18th consecutive month at strong levels led by continued expansion in new orders, production activity, employment and inventories, with suppliers continuing to struggle delivering to demand. The PMI at 60.8 is the highest level of expansion seen since May 2004, when it reached 61.4."

In corporate news, Best Buy added 2.51% after seeing its sales jump during its key holiday trading quarter, and Kohl's slipped 7.75% despite its own strong holiday sales fuelling a big earnings beat.

AMC Entertainment ticked ahead 2.01% following the release of its quarterly earnings that showed a record fourth-quarter revenue.

Elsewhere, Victoria’s Secret parent L Brands lost 10.40% after its quarterly outlook late on Wednesday left investors disappointed.

Software company Salesforce.com picked up 2.92% on the back of better-than-expected quarterly results.