Wall Street edges higher at open on bank results, US economic data

 A trader works on the floor of the New York Stock Exchange. PHOTO: AFP
A trader works on the floor of the New York Stock Exchange. PHOTO: AFP

WASHINGTON (REUTERS) - U.S. stocks opened higher on Thursday, after two days of losses, as investors assessed economic data and earnings reports from major banks.

As the reporting season gathers steam, investors will be parsing quarterly results to gauge the impact of a slowing global economy on U.S. companies.

Global stocks rebounded from two days of losses as investors bet the Federal Reserve will not raise interest rates until 2016. The Fed has said it will pull the trigger only if it sees signs of a sustainable economic recovery.

Data released on Thursday painted contrasting pictures of the state of the U.S. economy. While consumer prices posted their biggest drop in eight months in September, unemployment benefit claims fell in the last week.

Goldman Sachs shares fell 1.5 per cent to US$176.83 after the investment bank reported third-quarter results below expectations, hurt by weak bond trading.

Citigroup rose 1 per cent to US$51.19 after the third biggest U.S. bank's results beat estimates. "I think we could be looking at a bumpy mixed positive session," Peter Cardillo, chief market economist at Rockwell Global Capital in New York, adding that the market could turn as investors digest news through the day.

At 9:37 a.m. ET (1337 GMT), the Dow Jones industrial average was up 25.35 points, or 0.15 per cent, at 16,950.1, the S&P 500 was up 6.72 points, or 0.34 per cent, at 2,000.96 and the Nasdaq composite index was up 27.11 points, or 0.57 per cent, at 4,809.96.

Seven of the 10 major S&P sectors were up, with the financial sector's 0.9 per cent rise leading the advancers.

HCA Holdings shares sank 9.9 per cent to US$68.50 after the country's largest for-profit hospital operator said it expects third-quarter profit below expectations.

The stock weighed on the S&P health sector, dragging down other health care stocks including UnitedHealth , which was the biggest drag on the Dow.

Third-quarter results from major U.S. banks have been mixed so far, with only Wells Fargo reporting a rise in revenue and income from interest on loans.

The outlook for broader corporate earnings also does not look too bright. S&P 500 companies are expected to report a 4.2 per cent decline in third-quarter profit, the biggest in six years, according to Thomson Reuters data.

Wal-Mart's profit warning on Wednesday spooked investors, sparking the stock's biggest single-day loss in 25 years and dragging the overall market lower.

Schlumberger, Mattel and Advanced Micro Devices report after the close.

New York Fed President William Dudley and St Louis Fed President James Bullard are scheduled to speak at separate events on Thursday.