US open: Stocks inch higher as economic data beats forecasts

(Sharecast News) - US stock markets opened slightly higher on Thursday morning, but gains were modest as the S&P 500 continues to trade at record highs ahead of the long weekend. A barrage of economic data was released ahead of the opening bell on Wall Street, including jobless claims, consumer confidence, pending home sales and GDP figures that all came in ahead of expectations.

However, with markets closed for Good Friday, when the all-important PCE price index is released, investors were refraining from taking on too much risk.

After a half-hour into the trading session, the Dow was flat and the S&P 500 and Nasdaq were trading 0.1% higher. Strong gains on Wednesday pushed the S&P 500 to another all-time closing high of 5,258.49.

According to Lane Clark, co-founder of investment platform TPP, markets were "holding their breath" ahead of Friday's release of the PCE data - the Federal Reserve's preferred measure of inflation."Traders are wise to adopt a cautious stance this week".

Making headlines on Thursday was Fed governor Chris Waller who said that the central bank was in "no rush" to cut interest rates in light of stubborn inflation levels and stronger-than-expected labour-market data.

Recent data "tells me that it is prudent to hold this rate at its current restrictive stance perhaps for longer than previously thought to help keep inflation on a sustainable trajectory toward 2%," he said on Wednesday evening.

Economic data mostly better than forecast

Revisions to fourth-quarter GDP figures showed that the US economy grew at an annual rate of 3.4% at the end of 2023, up from an earlier estimate of 3.2%. Economists had expected no change from the initial reading.

Initial weekly jobless claims fell by 2,000 to 210,000 in the week ended 22 March, slightly better than the 215,00 expected by the market.

Pending home sales also beat forecasts, rising 1.6% in February after a revised 4.7% slump in January, slightly ahead of the 1.5% increase expected.

The University of Michigan consumer sentiment index rose to 79.4 in March, from 76.5 in February, and ahead of predictions for no change. This was the highest reading since July 2021.

However, the Chicago purchasing managers' index slipped further into negative territory (indicated by any reading below 50), falling to 41.4 in March from 44.0 a month earlier. The consensus estimate was 46.0.

Market movers

Home Depot fell slightly after revealing it is to acquire SRS, the specialty trade distributor that providers roofing materials and building supplies, for $18.25bn. The US home improvement retailer said SRS will accelerate its growth with the residential professional customer.

Retail pharmacy chain Walgreens Boots Alliance was rising strongly after the company released its second-quarter results that beat expectations, though the company cut the midpoint of its full-year earnings guidance due to a challenging retail environment.

Cinema chain AMC dropped sharply after the company announced a stock sale to improve liquidity following a soft first quarter at the box office.