Wall Street edges up on gains in consumer stocks

By Yashaswini Swamynathan

REUTERS - U.S. stocks reversed course and were up slightly on Thursday, as a rise in consumer shares helped offset losses in financials, but investors remained cautious over President Donald Trump's isolationist policies.

Investors are assessing consequences of Trump's latest actions, including labeling a refugee swap agreement with staunch rally Australia as a "dumb deal" and putting Iran "on notice" for firing a ballistic missile.

U.S. equities had enjoyed a frenetic post-election rally on bets that Trump would usher in an era of growth, stimulating the economy through tax cuts, simpler regulations and higher infrastructure spending.

However, the rally has been unraveling in the past weeks as Trump's priorities, such as imposing restriction on travel to the United States and withdrawing from a trade deal, have caused uncertainty and made it hard for investors to have conviction in the equity market.

"What you have is a tug-of-war between near-term positives in terms of economic data and earnings season juxtaposed against the confusion over what's important in the first 100 days of the new administration and when will we get to see things like tax reforms," said Art Hogan, chief market strategist at Wunderlich Equity Capital Markets in New York.

Earnings of S&P 500 companies are estimated to have risen 7.5 percent - the best growth in nine quarters, according to Thomson Reuters I/B/E/S.

Economic data has also been strong, with a report on Thursday showing a much bigger-than-expected drop in jobless claims last week. The next data point on investors' minds is the monthly nonfarm payrolls report due Friday.

Still, the Federal Reserve left interest rates unchanged on Wednesday, likely awaiting more clarity on Trump's fiscal policies.

The dollar dropped to a near 12-week low of 99.23 against a basket of major currencies. The greenback has been beaten down by Trump's comments on its strength and concerns over his protectionist policies. Prices of safe-haven gold rose to a 10-week high.

At 10:58 a.m. ET (1558 GMT), the Dow Jones Industrial Average was up 21.49 points, or 0.11 percent, at 19,912.43, the S&P 500 was up 3 points, or 0.13 percent, at 2,282.55 and the Nasdaq Composite was up 9.84 points, or 0.17 percent, at 5,652.49.

Five of the 11 major S&P 500 sectors were higher, with consumer staples in the lead followed by the defensive real estate index.

Philip Morris rose 3 percent following the cigarette maker's results. The stock gave the biggest boost to consumer staples, followed by Mead Johnson that jumped 22.4 percent after Reckitt Benckiser said it was in advanced talks to buy the company for $16.7 billion.

Financials, which would benefit in a higher-rate environment, were down 0.14 percent.

Ralph Lauren dropped nearly 10 percent. The company said Chief Executive Officer Stefan Larsson would leave following differences with the company's founder and chairman.

Results from a clutch of companies, including Amazon.com, Visa and Amgen, will keep investors busy on Thursday.

Advancing issues outnumbered decliners on the NYSE by 1,515 to 1,183. On the Nasdaq, 1,354 issues rose and 1,282 fell.

The S&P 500 index showed 12 new 52-week highs and five new lows, while the Nasdaq recorded 43 new highs and 18 new lows.

(Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Sriraj Kalluvila)