Benjamin Chiou Sharecast News
27 Jun, 2024 15:27 27 Jun, 2024 15:27

US open: Stocks inch higher as investors weigh economic data

dl wall street new york city wall st nyc new york stock exchange nyse nasdaq us usa united states of america trading finance unsplash
Sharecast / Roberto Junior via Unsplash

US stocks inched higher on Thursday though gains were only modest as investors weighed a barrage of incoming economic data that painted a mixed picture of the American economy.

By 1009 in New York, the Dow and S&P 500 were up 0.1% while the Nasdaq rose 0.2%.

Analyst James Harte of Tickmill Group said stocks were "holding up surprisingly well" despite the recent rise in the dollar and with both the S&P 500 and Nasdaq sitting just below their record-high levels reached last week.

"A hawkish shift from the Fed at the June FOMC has not dented the rally and while the market has paused for now, it remains very much in a bullish phase. Indeed, the price action suggests some confidence that the Fed will ultimately ease in September, despite the bank slashing rate-cut projections to one from three prior in line with upwardly revised inflation forecasts."

Eyes will also be turning to Friday's release of the US core personal consumption expenditures index – the Federal Reserve's preferred gauge of inflation. The annual rate of core PCE inflation is expected to have eased to 2.6% in May from 2.8% the month before.

Economic data comes in mixed

Initial jobless claims fell to 233,000 in the week ended 21 June, down from 239,000 the week before, coming in below the consensus forecast of 235,000. Claims declined for the second week after hitting a 10-month high of 243,000 in the first week of June. However, both the four-week moving average and continuing claims data for the previous week both rose.

Durable goods orders rose by just 0.1% in May following a revised 0.6% gain the previous month, though that was better than the 0.1% decline predicted by analysts.

Housing data for May continues to miss expectations, with pending home sales following the trend set by housing starts, building permits and new home sales over the past week. Pending sales dropped by 2.1% over the month, easing from the 7.7% slump in April but well below the 2.5% growth expected by the market.

Meanwhile, revisions to GDP growth for the first quarter meant the economy expanded at an annualised rate of 1.4%, up from the preliminary reading 1.3% but still down from 3.4% in the preceding three-month period.

Market movers

Second-quarter earnings season is now well underway – though doesn't really pick up for a couple of weeks when the big banks report.

Micron Technology shares were down 4.5% after the data storage group disappointed investors with its sales guidance after the bell on Wednesday. The company guided to revenues of $7.6bn for the current quarter, which was in line with expectations but may have underwhelmed investors following the stock's 70% surge since early January.

Food ingredients maker McCormick gained 5.7% after reassuring the market with an in-line set of quarterly figures, though full-year earnings forecasts were lowered slightly.

Denim brand Levi Strauss dropped more than 16% despite only marginally missing consensus forecasts with a 8% year-on-year rise in quarterly sales, as chief financial officer warned in an interview that consumers were "generally cautious". The share-price fall follows a 40%-plus gain in the stock so far this year.

Nike was trading flat ahead of the sporting goods giant's results after markets close.

contador