US open: Wall Street opens firmer, signing of new tariffs delayed
Trading on Wall Street opened in the green on Thursday, amid reports that the White House might yet tinker with its final proposals on tariffs.
According to Bloomberg, who cited a person familiar with planning within the Oval office, the signing of the proposed tariffs was delayed in order to have more time to prepare the legal documents.
At 1520 GMT, the Dow Jones Industrial Average was up 0.33%, while the S&P 500 and Nasdaq gained 0.26% and 0.29%, respectively after stocks on Wall Street pared losses into the close on Wednesday on reports that Canada and Mexico could get exemptions from the tariffs on steel and aluminium imports
David Morrison, chief market strategist at GKFX, said: "US stock index futures shrugged off early weakness and pushed into positive territory a few hours ahead of the open. Investors continue to play down concerns over Trump’s proposed tariffs and consequent fears of an escalation into an outright trade war. This is despite the resignation of Gary Cohn, Trump’s chief economic advisor, who was widely considered to be Wall Street’s man at the White House."
Earlier, European Central Bank president Mario Draghi took shots at Donald Trump's tariffs on US imports of steel and aluminium that triggered fears of a trade war, even as the ECB boss announced that the monetary authority was taking steps towards ending its crisis-era stimulus measures on Thursday, abandoning an explicit commitment to purchase more bonds and expand its quantitative easing programme - if necessary.
Draghi said that while the initial impact of the tariffs was "not going to be big", he noted that "unilateral decisions are dangerous", and voiced his concerns regarding the White House's chosen direction in terms of international economic relations.
"If you put tariffs against your allies you wonder who your enemies are," Draghi said.
Investors have been on edge since Trump announced last week that he was planning a 25% tariff on steel imports and a 10% tariff on aluminium, prompting fears of a trade war. On Wednesday, European Commission trade chief Cecilia Malmstrom said she had prepared a provisional list of all the US products that would see higher tariffs in Europe if Trump goes ahead with his plans.This includes duties on US bourbon, peanut butter, cranberries and orange juice.
Malmstrom also said that the EU would be taking the case before the World Trade Organisation.
On the corporate front, shares in pharmacy benefits manager Express Scripts picked up 11.71% after it agreed to be bought by health insurer Cigna in a cash and stock deal valued at around $67bn, which includes the assumption of approximately $15bn in Express debt. Cigna shares, however, were 9.33% weaker.
Burlington Stores surged 7.03% after its fourth-quarter earnings topped expectations, while Costco actually dropped 4.57% after the retailer posted higher-than-forecast quarterly revenues late on Wednesday.
Kroger fell back 11.55% after beating sales estimates and reporting in line with market expectations and American Eagle Outfitters dropped 10.06% despite beating same-store estimates.
In economic data, initial jobless claims rose by 21,000 to 231,000 in the seven days ended 3 March, reaching their highest level in a month-and-a-half just one week after dropping to the lowest level since 1969.
Analysts had predicted unemployment claims to come in at 220,000, although as analysts explained, seasonal quirks have historically seen numbers spike in February.