US open: Stocks track gains in Europe as investors eye oil prices
US stocks rose on Thursday, tracking gains in Europe as investors kept an eye on oil prices and processed weekly jobs data.
At 1448 BST, the Dow Jones Industrial Average increased 0.4%, while the S&P 500 and the Nasdaq gained 0.2%.
Oil prices were also sitting higher after the International Energy Agency forecast crude markets would rebalance in the next few months following several years of overproduction. However, Paris-based IEA also lowered its forecast for global oil demand in 2017.
Brent crude rose 1.12% to $44.55 per barrel and West Texas Intermediate increased 1.02% to $42.14 per barrel at 1456 BST.
Earlier, oil prices fell after data from the US Energy Information Administration on Wednesday showed an unexpected build in weekly crude inventories and following record Saudi Arabian production.
“At a time of relatively little news flow, traders are again focused on the movements in oil and whether we’re going to see another move back to the levels seen earlier this year,” said Craig Erlam, senior market analyst at Oanda.
He added: “The meeting between OPEC members next month on the sidelines of the International Energy Forum in Algeria will be key for prices now, although I remain sceptical about whether anything meaningful will come out of it, especially as reports emerge that Saudi Arabia is pumping at record levels and Iran is increasing production at a faster rate than expected.”
In economic data, the Labor Department revealed the number of Americans filing for unemployment benefits fell pretty much in line with expectations last week.
US initial jobless claims dropped by 1,000 from the previous week’s revised level of 267,000. The figure was revised down by 2,000. Economists had been expecting a decline to 265,000.
The four-week moving average of new claims was 262,750, up 3,000 from the previous week’s average, which was revised down by 500 to 259,750. The four-week average is considered more reliable as it smooths out sharp fluctuations in the more volatile weekly figures, giving a more accurate picture of the health of the labour market.
In company news, Macy’s shares jumped after it reported second-quarter sales and earnings that topped analysts’ expectations.
Kohl’s also surged after posting a surprise increase in quarterly profits as gross margins grew at the retailer.
Alibaba Group Holdings rallied as it revealed a better-than-expected rise in quarterly revenue despite a slowdown in its main market of China.
Shake Shack Inc. slumped after the burger chain late on Wednesday reported weak sales growth in the second quarter.
Valeant Pharmaceuticals tumbled on news of a federal investigation into whether the company defrauded insurers.