US open: Stocks struggle for direction after employment cost and consumer confidence data

US equities struggled for direction early on Friday, as investors digested reports on employment cost and consumer confidence.

Just after 1500 BST the Dow Jones Industrial Average was down 34 points to 17,711.47, while the S&P 500 and the Nasdaq were down three points and up by the same margin.

Friday data

The cost of employment in the US came to a sharp slowdown in the second quarter, data released on Friday showed.

The employment cost index rose 0.2% in the second quarter compared with a 0.7% pace in the previous three months, registering an all-time low since record began in 1982.

The figure was comfortably below forecast for a 0.6% gain.

Meanwhile, the Chicago PMI index climbed to 54.7% in July from 49.4% in the previous month, reaching its highest level since January.

Consumer sentiment fell to a final July reading of 93.1 from a final June level of 96.1, according to an University of Michigan report.

Elsewhere, China’s stocks rallied near the end of the week but still closed lower as government measures intended to lift the market waned.

The dollar was in retreat against the main currencies, losing 0.31% and 0.37% against the pound and the yen respectively and tumbling 1.3% against the euro, while gold futures dropped 0.75% to $1,080.20.

Oil prices fell, with West Texas Intermediate losing 0.75% to $48.16 a barrel, while Brent crude shed 0.49% to $53.05 a barrel.

Earnings in focus

In company news, oil giants Exxon Oil lost 3.57% after reporting its second quarter profit were halved by the slump in oil prices, while sector peer Chevron shed 3.33% after posting disappointing second quarter results ahead of the opening bell.

The group posted a sharp decline in revenue, while its upstream operation swung to a loss.

Food retailer Whole Foods slid 2.02% after analysts at Imperial Capital cut to the price target on the stock from $65 to $53.

Internet network LinkedIn plunged 10.8% after the group posted a $67.7m net loss in the second quarter, compared with $1m last year.

“The net loss of $67.7m is much larger than last year’s $1m, largely because of costs associated with its recent acquisition of Lynda.com,” said Jasper Lawler, analysts at CMC Markets.

“The bigger worry is a trend of high expenditure not being matched by high enough growth to justify the very high valuation of social media stocks.”

Expedia jumped 9.19% after posting better-than-expected second quarter results late on Thursday night, while Coca-Cola Enterprises surged 10.4% after plans for a tie-up in operations were revealed by the Wall Street Journal.