US open: Stocks off initial lows as data provides some cheer; earnings roll in

US stocks were trading mixed on Thursday, well off opening lows following the release of some better-than-expected economic data points, as investors sifted through a deluge of earnings ahead of results from the likes of Apple and Amazon.

All three of the main indices had opened sharply lower following uninspiring earnings reports and after the Federal Reserve raised its inflation outlook and signalled a move on benchmark rates at its next meeting.

By 1550 GMT, however, the Dow Jones Industrial Average and the S&P 500 were down just 0.1% to 26,117.18 and 2,821.09, respectively, while the Nasdaq was up 0.2% at 7,422.87, with a series of encouraging data releases helping to lift sentiment.

Figures from the Labor Department showed the number of Americans filing for unemployment benefits fell last week. US initial jobless claims declined by 1,000 to 230,000 from the previous week’s level, which was revised down from 233,000. Economists had been expecting a jump to 238,000.

The four-week moving average came in at 234,500, down 5,000 from the previous week’s average, which was revised down by 500.

Meanwhile, Markit’s manufacturing purchasing managers’ index came in at 55.5 in January, unchanged from the previous month and ahead of expectations for a drop to 54.9.

The Institute for Supply Management’s manufacturing index fell to 59.1 from 59.3 in December, but was ahead of expectations for a reading of 58.6.

Capital Economics said: "The small decline in the ISM manufacturing index in January still left the index well above historical averages and consistent with GDP growth of over 4% annualised. With domestic demand receiving a boost from tax cuts and external demand buoyed by strong growth overseas and a depreciating dollar, prospects for the manufacturing sector in 2018 look bright."

Figures on construction spending also beat estimates. According to the Commerce Department, spending was up 0.7% to an all-time high of $1.25trn in December, versus expectations for a 0.4% increase.

There was no shortage of corporate news for investors to sink their teeth into either.

Ebay surged following better-than-expected quarterly earnings late on Wednesday and after the company said it plans to take over payment-processing duties from PayPal. Shares in PayPal tumbled on the news, however.

Elsewhere, social media group Facebook was also in the black after solid fourth-quarter results, while shares in software company Microsoft were up after its quarterly earnings late on Wednesday surpassed expectations.

Time Warner advanced after reporting a 9% increase in fourth-quarter revenue, while Mastercard rose after its fourth-quarter profit and revenue exceeded analysts’ expectations.

Alibaba fell after its quarterly revenue beat expectations but earnings fell short, while medical device maker Boston Scientific and DowDuPont also declined after quarterly updates.

Ralph Lauren shares were weaker after the company's sales fell more than expected in the third quarter.

Earnings were due from Amazon, Alphabet and Apple after the close.

IG analyst Chris Beauchamp said: “Apple looks nicely poised for a rebound, especially if the company can pull a rabbit out of its hat where iPhone X orders are concerned and defy the doubters.”