US open: Stocks waver after two-day rally

US stocks struggled for direction on Wednesday following a two-day rally.

At 1527 BST, the Dow Jones Industrial Average was flat, the S&P 500 fell 0.04% and the Nasdaq rose 0.04%.

The S&P and the Dow closed on Tuesday at record highs, boosted by a jump in energy shares and better-than-expected second quarter earnings from Alcoa.

On Wednesday’s agenda, US import prices rose less than expected in June as rising costs for petroleum products were offset by falling consumer and capital goods prices, according to the Labor Department. Import prices increased 0.2% last month after an unrevised 1.4% jump in May. Economists had expected a 0.5% increase.

“Recently, US import prices have been dragged down by two major factors: the decline in oil prices and dollar strength,” said Barclays Research.

“With the effects of lower oil prices and past appreciation of the dollar having largely waned, the renewed weakness in import prices is a concern. Although we caution against over-interpreting import price data, this weakness is worth monitoring carefully, as it likely reflects soft demand, either domestically or internationally.”

Meanwhile, Dallas Fed President Robert Kaplan suggested a "slow, gradual, careful" approach to raising interest rates is very appropriate during a speech in Houston. He said global headwinds mean monetary policy should remain modestly, but not wildly, accommodative. At 2300 BST, Philadelphia Fed President Harker will give a speech on the economic outlook at the 2016 World Class Summit in Philadelphia.

Elsewhere, China’s trade surplus narrowed to $48.11bn in June from $49.98bn a month earlier as exports fell. Exports dropped 4.8% in June compared to a year ago following a 4.1% drop in May, according to the General Administration of Customs. Economists had expected a 5% decline. Imports decreased 8.4% year-on-year in June, more than the 6.2% slide expected by analysts, following a 0.4% fall in May.

Meanwhile, oil prices fell after the International Energy Agency (IEA) said a global supply glut was threatening market recovery. In its oil market report for July, IEA said OPEC crude output rose by 400,000 barrels per day in June to an eight-year high of 33.21m barrels per day, including newly re-joined Gabon.

Separately, the Energy Information Agency said weekly US crude inventories fell by 2.5m barrels to 521.8m barrels in the week to 8 July.

Brent crude dropped 2.6% to $47.23 per barrel and West Texas Intermediate fell 2.3% to $45.74 per barrel at 1545 BST.

Still to come, the Federal Reserve releases its Beige Book at 1900 BST and the Monthly Budget Statement is due at the same time.

On the company front, Juno Therapeutics gained after the drugmaker late Tuesday said it would resume a drug trial of a potential leukemia treatment.

LED chips maker SemiLEDS Corp. slumped after saying late Tuesday that third quarter its loss widened to $3.3m on a 18% drop in revenue.