US open: Dow Jones dragged by oil stocks as reporting season hits peak

US stocks opened lower on Thursday before soon finding their footing as traders continued to digest the Federal Reserve's policy statement alongside a heavy buffet of earnings releases and some mixed jobs data.

Thursday was the busiest day on the earnings calendar, with 60 S&P 500 companies due to report quarterly results, while recent rising rig data meant the crude prices were wallowing, with West Texas Intermediate down 1.4% at $41.35 and Brent sliding similarly to $42.85.

Following the fruitless previous session when a juicy set of Apple earnings failed to froth up the market, Thursday saw the tech giant continue to lead the Dow Jones, though with only nine of the 30 stocks in positive territory the index was weighed down by oil stocks, falling 0.33% at 18,412.1 after an hour's trading.

The S&P was 0.2% lower at 2,162.69, while the Nasdaq was peeling off its highest levels since December, down 0.1% at 5,135.4.

Overnight the Fed's rate setting committee decided to stand pat at its policy meeting on Wednesday evening, though it did note that hiring conditions had improved and the economy had been growing at a moderate rate, which was seen as a sign that the Fed was not too worried about the UK’s vote to leave the European Union on 24 June.

The Fed added that near-term risks to the economic outlook had diminished, signalling that interest rates could rise in coming months.

FXTM analyst Lukman Otunuga pointed out that the dollar had displayed increased stability: "Wednesday’s hawkish tilted FOMC statement has bolstered sentiment towards the dollar with further appreciations expected as US data improves," he said.

"Investors may direct their attention towards the unemployment claims which could compound to the attributes needed for the Fed to make a move in 2016. US labour continues to display signs of resilience in a period of global uncertainty and if next week’s NFP report follows this pattern then the Fed could be closer to breaking the tradition of central bank caution."

US jobless claims rose by more than expected last week, according to the Labor Department. Economists had expected initial jobless claims to rise to 262,000 in the week the 23 July, compared to an upwardly revised 252,000 the previous week.

Continuing jobless claims – which include people already receiving unemployment checks - increased by 7,000 to 2.14m in the week ended 16 July, slightly below forecasts of 2.13m.

“Overall, the ongoing decline in initial and continuing claims indicates substantial underlying strength in labour markets, at least from the separations side,” said Barclays Research.

Ford was screeching lower to the bottom of the S&P list as a weak showing from China put the brakes on second quarter results, despite a better showing from Europe and South America. Sales incentives also led to lower profit margins, dragging earnings for the latest quarter down to 49 cents a share from 54 cents last year and below analysts forecasts.

Social networking group Facebook was sitting atop the Nasdaq charts after a big second quarter release overnight that easily surpassed analyst estimates, with total revenue growing 59.2% to $6.44bn, with mobile advertising revenue representing about 84% of the total. Results from subsidiaries Instagram and Whatsapp, as well as the Facebook Messenger app, all contributed to bringing in solid advertising income.

Scraping the bottom of the Nasdaq was Whole Foods after the premium-price grocery chain's uninspiring results were followed by a Goldman Sachs downgrade to "sell" from "neutral" and then on Thursday the US Patent and Trademark Office rejected its application to upgrade its new slogan from "America's Healthiest Grocery Store" to the loftier "World's Healthiest Grocery Store".

Dow Jones - Risers

Apple Inc. (AAPL) $103.92 0.98%
Visa Inc. (V) $79.27 0.94%
Travelers Company Inc. (TRV) $117.21 0.67%
Procter & Gamble Co. (PG) $84.87 0.49%
Home Depot Inc. (HD) $136.92 0.45%
Unitedhealth Group Inc. (UNH) $142.26 0.41%
American Express Co. (AXP) $64.73 0.22%
Coca-Cola Co. (KO) $43.43 0.07%
United Technologies Corp. (UTX) $107.70 0.01%
Johnson & Johnson (JNJ) $124.76 -0.01%