Thursday's Stock Market Open: US Shares Mixed On Soft Economic Data

U.S. stocks opened mixed Thursday following Wednesday’s nearly 500-point drop as global markets were pressured by weak economic data and growth worries.

At noon, the Dow Jones Industrial Average had largely recovered from a more than 200-point loss triggered by a disappointing Non-Manufacturing Index report. The Dow was off 35 points or 0.13% at 26,043.71. The S&P 500 was up 3 points or 0.11% to 2890.87 while the Nasdaq Composite added 22 points or 0.28% to 7,806.77.

The Dow has given up more than 800 points in the past two days.

“Traders driven by quantitative strategies are also seeing an ugly picture with all U.S. three major indexes falling below their 50 and 100-day moving averages, which is usually interpreted as more turbulence ahead,” said Jameel Ahmad, global head of currency strategy and market research at FXTM.

U.S. initial jobless claims rose slightly last week to a seasonally adjusted 219,000 for the week ending Sept. 28, up 4,000 from the preceding week. Data for the preceding week was revised upward by 2,000 applications.

Analysts blamed part of the increase on the ongoing strike at General Motors as the effects of the walkout trickle down to nonstriking employees and suppliers. Layoffs remained low.

Coupled with a weak ADP National Employment Report Wednesday, which saw just 135,000 jobs added last month, the jobless claims numbers could point to a softening labor market. On Tuesday, the Institute for Supply Management reported manufacturing activity at a 10-year low.

In Europe, data indicated the economy stalled at the end of the third quarter as the eurozone wrestled with the upcoming Brexit deadline. British Prime Minister Boris Johnson submitted a five-point plan that he said could be used as a basis for negotiation but remained adamant against extending the Oct. 31 deadline for the United Kingdom’s divorce from the European Union.

Adrian Lowcock, head of personal investing at Willis Owen Limited, predicted market volatility as investors focus on the U.S. China trade talks, which are scheduled for next week.

“The US manufacturing data is grim and paints a negative outlook for the global economy,” he said.

Asian markets were mostly lower. Hong Kong’s Hang Seng closed up 0.26% but the Japan Nikkei 225 was off 2.01% and China’s Shanghai Composite dropped 0.92%. Australia’s S&P/ASX fell 2.21%.

London’s FTSE was off 0.63%, the German DAX plunged 2.76% and the French CAC 40 gained 0.3%.

The British pound was up 0.67% to $1.238 while the euro edged up 0.26% to $1.0987. The dollar index was off 0.32%.

Oil futures were lower. Crude traded at $51.95, off 1.31%, while Brent crude traded at $57.88, off 0.88%. Gold and silver were higher.