US open: Markets start higher with energy stocks lifted by rising oil prices
The Dow moved towards its 10th consecutive day of gains as US stocks opened higher on Thursday, led by energy stocks buoyed by firmer oil prices and a weak dollar.
On opening the Dow Jones Industrial Average and the S&P 500 both rose 0.2% to 20,820 and 2,367, respectively, while the Nasdaq added 0.1% to 5,865.
The Dow was also coming off its longest run of straight record closes since 1987.
Oil prices rose after data from the American Petroleum Institute showed an 884,000 barrel drop in US crude supplies last week. This pushed up oil stocks, with giants Chevron and ExxonMobil higher by 1.1% and 0.67%, respectively.
Later on Thursday, investors will eye the latest figures from the US Energy Information Administration.
West Texas Intermediate was up 1.94% to $54.65 per barrel and Brent crude rose 2% to $56.98.
In currency markets, the dollar was down 0.5% against the pound to 0.7994, fell 0.2% versus the euro to 0.9452 and fell 0.46% against the yen to 112.79.
Traders were also digesting Wednesday’s publication minutes from the Federal Reserve's December meeting.
Investors were hoping that the minutes “would provide additional clarity on its interest rate expectations," said Craig Erlam, senior market analyst at Oanda, but instead the minutes displayed the central bank's uncertainty about how to proceed, "largely due to the unknown effects of what Donald Trump’s stimulus plans will have on the economy and inflation. In effect, the Fed is as much in limbo as investors are because markets have rallied strongly at the prospect of ‘phenomenal’ tax cuts and major spending but as of yet, nothing has been delivered."
With markets continuing to grind higher, Erlam said it appeared investors "are unwilling to go against the rally but at the same time, there’s little conviction in it either. At some point, in the absence of details on Trump’s tax and stimulus plans he rally may run out of steam.”
He said that he expects the Fed “to proceed with caution and come the March meeting, if it has no details on Trump’s stimulus plans it will likely wait until May or June. However, as we’ve seen from recent efforts, it is keen to keep March on the table because should Trump announce substantial measures, the Fed may wish to hike in March in order to avoid falling behind the curve and needing to raise at a faster pace later this year”.
On the data front, US initial jobless claims last week were up 6,000 from the previous week's level, which was revised down by 1,000 to 238,000. Analysts had expected a smaller increase to 241,000. Meanwhile, the four-week moving average came in at 241,000, down 4,000 from the previous week's average, which was revised down to 245,000 from 245,250.
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 corporate news, Pernix Therapeutics rocketed 52.02% after the pharmaceutical won a patent case against Actavis Laboratories part of Allergan.
Electric car maker Tesla sank 4.82% advanced in pre-market trade after it posted a bigger-than-expected quarterly loss late on Wednesday but beat analysts' expectations on sales.
Victoria's Secret parent L Brands tumbled 15.76% after it issued weak guidance for 2017 late on Wednesday.
Hormel Foods was sank 6.68% after it reported first-quarter net earnings per share of 44 cents versus 43 cents a year ago and revenue of $2.28bn compared to $2.29bn.
AMC Network gained 5.97% to it beat fourth quarter earnings and revenue expectations.