US open: Dow drops 90 points despite positive GDP, housing data

US stocks declined early on Tuesday, as an upwardly revised GDP data failed to allay concerns due to a fresh rise in geopolitical tensions.

Shortly before 1500 GMT, the Dow Jones Industrial was down 91 points to 17,701.82, while the S&P 500 and the Nasdaq were eight and 18 points lower respectively.

Earlier on Tuesday, a Turkish military jet was reported to have shot down a Russian warplane near the Syrian border, after it had allegedly entered Turkish airspace and ignored warnings to return.

“The heightened geopolitical threat from the downing of a Russian jet by a NATO member country while Brussels remains in lockdown is sending people into safe havens like the yen and gold and out of travel-sensitive stocks,” said CMC Markets’ analyst Jasper Lawler.

Following the downing of the Russian aircraft, European equities were firmly in the red, while Asian markets endured a mixed session as the slump in commodities prices continued to weigh on stocks in the region.

US GDP revised higher

US economic growth was revised higher in the third quarter as expected, the Commerce Department revealed on Tuesday.

The second estimate of gross domestic product was raised to an annualised 2.1% from a previous 1.5%. GDP rose 3.9% in the second quarter.

“Real gross domestic income was much stronger than GDP, at 3.1%, suggesting scope for further upward revision to GDP in due course,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics.

“We look for 3% Q4 GDP, a bit less than previously because the scope for an inventory rebound has been greatly reduced by the revised Q3 numbers.”

Meanwhile, the S&P/Case-Shiller index rose 0.2% in the three months to the end of September, while house prices rose 5.5% year-on-year compared with a 5.1% gain in the previous month.

On a month-on-month basis, prices rose 0.6% compared with a 0.1% gain in the previous month and analysts' expectations for a 0.3% advance.

Still to come on the economic calendar, investors will analyse a reading on consumer confidence for November at 1500 GMT.

Elsewhere, the dollar fell 0.12% and 0.34% against the euro and the yen respectively but gained 0.35% against the pound, while gold spot rose 0.77% to $1,077.41.

Oil prices rebounded, with West Texas Intermediate gaining 2.91% to $43 a barrel and Brent crude rising 2.80% to $46.12 a barrel.

In company news, high-end jeweller Tiffany & Co. gained 0.42% despite issuing a profit warning, while Dollar Tree rose 2.85% even it missed quarterly profit targets.

Campbell Soups rose 5% after it raised its earnings outlook for the full year.