US open: Better-than-expected jobless claims send markets higher

After the opening bell, the Dow Jones Industrial Average added 0.17%, the S&P 500 was up 0.21% and the Nasdaq gained 0.33%.

Oil prices continued to recover after the American Petroleum Institute said on late Wednesday crude supplies fell 6.7 million barrels for the week ended 1 July, easing concerns about the global crude glut.

West Texas Intermediate gained 1.41% to $48.11 per barrel and Brent crude rose 1.37% to $49.48.

The closely-watched Energy Information Administration report is due at 1600 BST.

Attention before markets opened was on jobs data, with the ADP private payrolls report coming in at a gain of 172,000 jobs in June.

That was ahead of expectations for a gain of 160,000 jobs, but still down from May’s 173,000.

US initial jobless claims data came in at a seasonally-adjusted 254,000 for the week to 2 July, with well below the forecast for 267,000 and a sizeable drop from 268,000 in the prior week as well.

The data comes ahead of the non-farm payrolls report on Friday, which the Fed has been monitoring closely to gauge the health of the labour market as it considers its policy measures.

Traders also continued to digest Wednesday’s Federal Reserve minutes of the 14-15 June policy meeting, which was seen to suggest an interest rate hike is a long way off.

The minutes showed most policymakers agreed to keep interest rates to a range between 0.25% and 0.5% following a weak May jobs report and due to uncertainty leading up to Britain’s 23 June European Union referendum.

“The Brexit vote alone is likely to deter them from raising rates until at least the end of the year as they wait to see what the knock on effects will be, both from an economic and financial markets perspective,” said Craig Erlam, senior market analyst at Oanda.

On the corporate front, snack and beverage maker PepsiCo reported adjusted second-quarter profit of $1.25 per share, which was five cents above estimates, with revenue also exceeding expectations.

Hard drive manufacturer Western Digital raised its guidance for the fourth quarter, which ended on July 1, and revealed the appointment of Mark Long as executive vice president of finance, becoming chief financial officer on 1 September.

Anti-virus software producer AVG Technologies is to be gobbled up by Dutch competitor Avast Software for $1.3bn in cash.

Biomarin Pharmaceutical was rumoured to be a takeover target of Swiss drug giant Roche in early chatter, in a deal that could be worth $130 to $150 per share.