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US: Wall St higher as manufacturing activity rebounds
[NEW YORK] Wall Street was slightly higher in choppy trading on Thursday morning as data showed an uptick in US manufacturing activity, but gains were limited by a drop in oil prices.
Orders for durable goods rose 4.9 per cent in January, beating the 2.5 per cent estimated, as demand picked up across the board.
Crude prices, the major stock market driver this year, swung lower as a global oversupply offset strong US gasoline demand.
Fears are also increasing about the impact of low oil prices hitting the financial sector, with banks preparing for a wave of defaults from oil and gas companies. "The market is being driven by oil, technicals and on pure emotion rather than tangible fundamentals," said Andre Bakhos, managing director at Janlyn Capital in Bernardsville, New Jersey. "Notwithstanding the recent rally, we're starting to enter a period that's going to give us greater volatility, choppiness and erratic behavior." At 9:37 a.m. ET (1437 GMT), the Dow Jones industrial average was up 70.06 points, or 0.42 per cent, at 16,555.05.
The S&P 500 was up 7.88 points, or 0.41 per cent, at 1,937.68 and the Nasdaq Composite index was up 13.41 points, or 0.3 per cent, at 4,556.01.
Eight of the 10 major S&P sectors were higher, led by a 0.57 per cent rise in financials. Banks were the biggest influence.
Investors are also watching out for the US Federal Reserve's next move on interest rates. While Fed Chair Janet Yellen hinted at raising rates in 2016, other policymakers are calling for a pause on the plan.
The Fed's December rate hike may have spurred the selloff in equities because it was misinterpreted as a firm commitment to raise rates steadily through the year, St. Louis Fed President James Bullard, a voting member of the FOMC, told CNBC on Thursday.
Jobless data, also released on Thursday, showed claims increased slightly more-than-expected to 272,000 last week, but remained below levels consistent with a tightening labor market.
Shares of Salesforce surged 11 per cent to $69.38 after the company reported higher-than-expected revenue and raised its full-year forecast. The stock gave the biggest boost to the S&P 500.
HP Inc was down 6.2 per cent at $10.15 after the printer and PC maker forecast profit below estimates and said it would accelerate its restructuring program.
Advancing issues outnumbered decliners on the NYSE by 1,908 to 702. On the Nasdaq, 1,391 issues rose and 696 fell.
The S&P 500 index showed 17 new 52-week highs and no new lows, while the Nasdaq recorded 17 new highs and seven lows.