US open: Stocks mixed as investors grow weary over Trump fiscal policies

US stocks were mixed on Thursday following downbeat trading in the previous session, as investors grew increasingly sceptical that President Donald Trump will be able to deliver on his promised tax cuts to boost business.

At 1542 GMT, the Dow Jones Industrial Average was flat at 20,660.21, but the S&P 500 was up 0.23% to 2,349.48 and the Nasdaq rose 0.43% to 5,818.90.

The downturn in stocks came after the yield on the 10-year US Treasury note dropped to a three-week low on Tuesday as investors grew concerned whether Trump will be successful in repealing Obamacare given his intention to divert the programme's funding to his governmental spending agenda, ahead of a congressional vote this week on healthcare policy.

He had also promised to spend $1trn on infrastructure, lax financial regulation and to cut taxes.

However, Jasper Lawler senior market analyst at London Capital Group, said it was simplistic to lay the blame for the market decline at Trump’s door as the first US rate hike 2017, a slump in oil prices, the future of quantitative easing under higher inflation and end of quarter portfolio manoeuvring have also played their part.

“Still the Trump presidency, which has played such a large role in the rise in markets since November, is not to be ignored as a factor.

“Probably the two biggest contributors to the idea that the world is reflating; a Trump-led fiscal boost and rising oil prices have come unstuck in the past fortnight. We have talked previously about the importance of Trump’s healthcare reform. The ‘Repeal and Replace’ of Obamacare is a beta test for tax cuts. The universally agreed upon notion that ‘Obamacare is bad’ inside the Republican party struggling to make headway in Congress is a bad omen for the trickier process of tax reform,” Lawler said.

In currency markets, the dollar was up 0.16% against the pound to 0.8027, was flat verses the euro at 0.9244 and down 0.53% against the yen to 111.12.

Meanwhile, oil prices retreated after data from the Energy Information Administration revealed that US crude inventories rose by 5m barrels last week, compared with the 2.8m increase expected, while crude imports increased by 1.069m barrels per day.

West Texas Intermediate was down 1.02% to $47.73 per barrel and Brent crude fell 1.19% to $50.36.

On the data front, existing home sales fell 3.7% in February to a seasonally-adjusted annual rate of 5.48m from 5.69m in January. Analysts had been expecting a more modest decline of 2%. Despite last month's decline, February's sales pace was still 5.4% above a year ago.

The median price for an existing home was $228,400, up 7.7% from February 2016 and marking the fastest price increase since last January. It also marked the 60th consecutive month of year-over-year gains.

In corporate news, Sears slumped 15.49% after the retailer said it doubted that it would be able to “continue as a going concern” if the turnaround plan failed.

Nike dropped 6.03% after it issued a downbeat outlook for sales growth late on Tuesday.

Chemicals maker PPG Industries was 1.31% lower after Dutch rival AkzoNobel rejected a second takeover offer from the company.

American Airlines was down 1.35% after a downgrade to ‘equalweight’ from ‘overweight’ by Morgan Stanley.