- Wal-Mart, Facebook drag on markets
- US manufacturing PMI jumps to four-year high
- CPI inflation picks up, other data comes in mixed
Dow Jones: -0.07%
S&P 500: -0.10%
US stocks opened with small losses on Thursday morning in New York as a surge in domestic manufacturing activity was offset by disappointing results from retail giant Wal-Mart and a fall from Facebook.
Wal-Mart, the world's biggest retailer, was trading lower in early trading after giving weaker-than-expected guidance for the current year; Facebook fell after agreeing to buy social media messaging company WhatsApp for $19bn.
Investors were still digesting last night's minutes from the latest Federal Reserve meeting, at which the central bank re-affirmed its commitment to continue tapering in "measured steps" despite recent weak economic data. Furthermore, some policymakers even suggested raising interest rates "relatively soon".
Manufacturing PMI surges, inflation picks up
Markit's US 'flash' manufacturing purchasing managers' index (PMI) jumped to 56.7 in February, up from a three-month low of 53.7 in January, representing the best growth in activity since May 2010.
Consumer prices rose by 1.6% year-on-year in January, up from the 1.5% rate a month earlier, as expected. On the month inflation increased 0.1%, matching economists' estimates, easing from 0.2% in December.
Jobless claims decreased by 3,000 to 336,000 in the week ending on February 15th, according to the US Department of Labor, more or less in line with the consensus forecast for 335,000.
The Leading Indicators index increased by 0.3% in January, as expected, following a revised 0% reading the month before.
The Philadelphia Fed manufacturing index dropped to -6.3 in February, down from 9.4 before and the 8.0 expected by analysts.
Wal-Mart, Facebook provide a drag
Wal-Mart fell after fourth-quarter earnings per share (EPS) came in at the bottom end of guidance. The company also said that adjusted EPS would come in between $5.10-5.45 in the year ending January 2015, compared with the $5.54 expected by analysts, and that sales would grow at the low-end of the projected 3-5% range.
Facebook declined as investors gave a cool reaction to the $19bn acquisition of WhatsApp, marking the largest single deal in company's 10-year history. How the service will pay for itself is not yet clear. Chief Executive Mark Zuckerberg noted that advertising may not be the best way of monetising mobile messaging but did not offer alternatives.
Electric car maker Tesla Motors was extending gains after impressing the market with earnings yesterday, as it narrowed losses in the fourth quarter on revenues which doubled to $615m. The company also said it expects a 55% increase in production this year.