US open: Wall Street struggles to hold onto weekly gains

Wall Street is struggling to stay in the black for the week despite a stronger than expected reading on the US economy for the first quarter, with steep losses in Exxon Mobil and US Steel apparently offsetting well-received updates from some of Wall Street's biggest tech names.

At 1544 BST, the Dow Jones Industrial Average was off by a slight 0.37% or 84.53 points and trading at 24,236.11, alongside a dip of 0.09% or 2.36 points to 2,664.64 on the S&P 500 while the Nasdaq Composite was slipping 0.13% or 9.95 points to 7,107.84.

Yet in the background, some analysts appeared to be turning somewhat more 'bullish', with strategists at BoA-Merrill for example telling clients: "Even better news = synchronized monetary blinking: China is easing (the 1st catalyst for US$ rally) & BoE/BoC/Riksbank all "blinking" as FX appreciation + no global inflation allows central banks to turn dovish."

To take note of as well, at 5.4 the investment bank's Bull&Bear Indicator had moved back into 'neutral' territory during the last week, potentially a positive development.

On the economic front, Commerce reported that the annualised rate of gorwth in US gross domestic product slowed from a 2.9% clip over the last three months of 2017 to 2.3% in the first quarter of 2018.

That was nonetheless better than the 2.1% pace economists had penciled-in, especially taking into account the typical seasonal and statistical quirks inherent to readings on first quarter activity each year.

Furthemore, in nominal terms Friday's data pushed the nominal year-on-year rate of growth in US GDP from 4.3% to 4.8% - its best reading since the start of 2015 - according to Berenberg Capital Markets.

"The improved momentum in current-dollar spending will result in upward pressure on inflation and wage-setting behavior. Sustained strong gains in business investment, which rose a solid 6% in Q1, would generate a pickup in productivity gains," said Berenberg's Mickey Levy and Roiana Reid following the data.

Significantly, at the end of the week the yield on the benchmark 10-year US Treasury note was down by three basis points at 2.95%.

Stock in Amazon was at the head of the tech parade at the end of the week after the company said late on Thursday that revenues surged 43% in the first quarter, while net profit rose to $1.6bn from $724m in the same period a year ago.

Its shares were trading 3.68% higher.

Microsoft was also in the black after better-than-expected quarterly results late on Thursday and strong guidance, while Intel was set to gain after a quarterly earnings beat and upbeat outlook.

Expedia shares were surging meanwhile following better quarterly sales than forecast late on Thursday and a smaller loss than expected.

On the downside, Exxon Mobil and United States Steel were pacing losses.

Weighing on the former were its mixed quarterly results despite higher commodity prices and cost reductions, while Pittsburgh, Pennsylvania-based US Steel was down after warning of the possibility of "operational volatility" in the year ahead.

Starbucks was also retreating following mixed second-quarter results while shares in Colgate-Palmolive were edging higher despite a quarterly revenue miss before the opening bell.

On the geopolitical front, Kim Jong-un pledged a "new history" in relations with his neighbours as became the first North Korean leader to visit South Korea since the end of the Korean War in 1953. The two leaders signed a declaration pledging to work towards a complete denuclearisation of the Korean peninsula and agreed to formally end the Korean War with a peace treaty.