US close: Markets mixed as US-China talks kick off in Washington

US stocks finished in a mixed state on Thursday, as investors kept their eye on a key meeting between Donald Trump and Chinese Vice Premier Liu He.

The Dow Jones Industrial Average finished up 0.64% at 26,384.63 and the S&P 500 added 0.21% to 2,879.39, while the Nasdaq Composite was down 0.05% at 7,891.78.

At the open, the Dow was 128 points higher as Sino-US trade relations were in the spotlight, with Trump meeting Liu He later in the day as trade talks between the two nations continued in Washington.

White House economic adviser Larry Kudlow said on Wednesday that Chinese and US negotiators were making "good progress" and although a deal has not yet been struck, the two parties were edging closer.

James Hughes, chief market analyst at Axitrader, said the meeting could be a meaningful step forward in finding a compromise, although Wednesday's economic data from the US laid bare the impact that the global economic slowdown is having on the US economy.

"In turn, this is nudging up the prospects of an earlier rate cut from the Fed - markets are now pricing in a 20% chance of a quarter point easing at the June meeting - but the accompanying optimism this should bring doesn’t seem to be flowing towards stocks just yet.”

On the macro calendar, the number of Americans filing for unemployment benefits last week fell unexpectedly, according to figures from the Labor Department.

US initial jobless claims declined by 10,000 from the previous week's revised level to 202,000, beating expectations for an increase to 216,000 and marking the lowest level for initial claims since 6 December 1969.

The previous week's level was revised up by 1,000 to 212,000.

Meanwhile, the four-week moving average came in at 213,500, down 4,000 from the previous week's average, which was revised up by 250.

“This is a very welcome surprise, coming hot on the heels of significant downward revisions to claims which suggested that the trend was flat rather than rising, as prior data suggested,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics.

“One week does not prove anything, but if this reading - the lowest since December 1969 - is repeated, it would suggest that the trend is still falling.

“We’re struggling with that idea, given that economic growth clearly has slowed from last year's tax-cut fuelled pace, but the data certainly suggest that our fears of a steady, shallow rise in the first half this year were overdone.”

Shepherdson noted that the data over the next few weeks, and this week’s number, were subject to distortions caused by the shifting date of Easter from year to year.

“As always, the trend is more important than single weekly numbers.”

In corporate news, Tesla shares slumped 8.23% at the open after the electric car maker said first-quarter vehicle deliveries slid 31% from the fourth quarter of 2018 to 63,000.

Analysts had been pencilled in a figure of 76,000.

David Cheetham, chief market analyst at XTB, said the drop in deliveries was "significantly" worse than even the most pessimistic of analyst forecasts and comes at a time when the firm is aiming to ramp up production.

"The results could have been even worse for Tesla with only half of total deliveries for the quarter completed with just 10 days to go, but even with the late push final figures of 63,000 are well below the 90,700 seen in the fourth quarter of 2018.

"The company still believe they can make up the shortfall, with a bounce-back in the next quarter and they have reaffirmed their year-end guidance of 360,000-400,000 total deliveries.

“Orders for the models continue to be strong but the company is clearly struggling with the logistics of meeting this demand.”

Elsewhere, shares in Office Depot tumbled 23.61% after the release of the company's preliminary first-quarter results.