US open: Stocks rise ahead of healthcare bill vote
US equity markets rose on Thursday ahead of the closely watched vote on the Republican healthcare bill.
At 1542 GMT, the Dow Jones Industrial Average was up 20,740.45, the S&P 500 added 0.4% to 2,357.74 and the Nasdaq was 0.3% firmer to 5,839.17.
Meanwhile, oil prices retreated, with West Texas Intermediate down 0.46% to $47.82 per barrel and Brent crude fell 0.27% to $50.50.
In currency markets, the dollar fell 0.3% against the pound to 0.7986, was up 0.1% verses the euro at 0.9271 and flat against the yen at 111.07.
Later in the session, investors will be watching out for a House of Representatives vote on the GOP plan to replace the Affordable Care Act, known as Obamacare, to see if President Donald Trump is able to pass legislation for his ambitious policies.
Markets had previously rallied on Trump’s promise to spend $1trn on infrastructure, loosen financial regulation and cut taxes.
Craig Erlam, senior market analyst at Oanda, said: “Trump’s difficulty in getting people on board with his plans was largely blamed for the market selling off earlier in the week, with investors apparently seeing this as a sign that Trump may also struggle to get his spending plans and tax changes through.
“Should the healthcare plan be approved by Congress then we could see a resumption of the Trump rally while a failure could leave markets vulnerable to a larger correction.”
There had been a plethora of speeches from Fed officials this week after the central bank raised interest rates by 25 basis points last week to between 0.755 and 1%, however investors may have been left a little disappointed by Fed chair Janet Yellen’s speech today in Washington.
Yellen did not touch on monetary policy and instead spoke about financial education for children as she opened a two-day conference and did not take any questions from the press.
Investors will instead turn their attention to comments by Minneapolis Fed President Neel Kashkari who will speak later in the day. Kashkari was the only dissenter on the FOMC who voted against last week’s interest rate hike.
On the data front, initial jobless claims were up 15,000 to 258,000 from the previous week’s average, which was revised up to 243,000 from 241,000. Analysts had been expecting a drop to 240,000.
The four-week moving average came in at 240,000, up 1,000 from the previous week’s average, which was revised up to 239,000 from 237,250.
Meanwhile, new home sales were up 6.1% to 592,000 from the revised January rate of 558,000. Economists had been expecting a smaller increase to 564,000. On the year, sales were up 12.8%.
The median price of a new home was $296,200, down 3.9% on the month and 4.9% compared to a year ago.
In corporate news, Five Below climbed 11.4% after better-than-expected earnings and the retailer said it would open 100 new stores this year.
PPG Industries was up 0.7% after Elliot Management said on Wednesday that it might use corporate rules to call a special shareholders meeting to get AkzoNobel – in which it holds a 3% stake – to talk to the US chemicals maker.
Microsoft fell 0.17% following news that it has agreed to license a number of patents to Toyota Motor Corp and Ford Motors was also down 1.15% after the carmaker posted an earnings outlook that was below expectations.