US open: Dow plunges 148 points as investors digest raft of economic data

US stocks fell on Tuesday after a report showed orders for durable goods dropped in April, while housing data pointed to an increase in prices over the first three months of the year.

Just after 15:00 BST, the Dow Jones Industrial Average was down 148 points, while the S&P 500 and the Nasdaq shed 14 and 42 points respectively.

The dollar rallied on Friday, boosted by higher-than-expected inflation data, and maintained the momentum on Tuesday, gaining 1.32% against the yen, 0.69% against the pound and 0.63% against the euro.

US durable goods orders fell as expected in April, although the previous month's count was revised significantly higher.

Orders for goods made to last more than three years dropped by 0.5% month-on-month, to reach $235.5bn, according to the Department of Commerce.

"The upshot is that the anticipated pick-up in the growth rate of business investment in equipment in the second quarter appears to be firmly on track," said Paul Ashworth, chief US economist at Capital Economics.

"This only makes up more confident that second-quarter GDP growth will be a healthy 2.5% to 3.0% annualised."

Sales of new homes in the US rebounded strongly in April, after suffering a sharp decline in March.

According to data released on Tuesday, new home sales jumped 26% year-on-year in April to an annual rate of 517,000, marking a 6.8% increase from the previous month.

US house prices climbed in the first quarter, according to the Federal Housing Finance Agency House Price Index.

House prices increased 1.3% year-on-year in the first three months of the year, marking the 15th consecutive quarterly price increase in the index.

US house prices rose in March, according to the S&P/Case-Shiller index, which monitors prices in 20 cities.

Prices rose 0.9% on the month and 5% year-over-year. Economists had expected year-over-year growth of 4.6%, while the monthly gain was in line with expectations.

Meanwhile, the US consumer confidence index for May rose to 95.4 from 95.2 the month before, according to data by the Conference Board.

The reading beat forecasts by analysts, who had expected a slight dip to 95.0.

Stanley Fischer, the Fed vice chairman will speak on “the Fed and the global economy” at 17:30 BST in Tel Aviv, while Richmond Fed President Jeffrey Lacker, a non-voting member of the FOMC, will speak at 23:10 BST at Louisiana State University.

Time Warner slides on merger

In company news, Time Warner Cable fell 0.86% after Charter Communications said it was on the verge of agreeing a takeover deal worth $55bn for the cable-TV group. Charter Communications gained 0.54%.

Social media giant Twitter climbed 0.27% after reports emerged that the company was in negotiations to acquire article sharing platform Flipboard for approximately $1bn.

Biotech group Cerulean Pharma rose 2.66% after saying the US Food and Drug Administration had granted orphan drug designation to its CRLX101 drug for ovarian cancer.

Elsewhere, European stocks were mostly trading in the red as Greece’s bailout negotiations continued, while Asian markets closed mixed.

Oil prices tumbled, with West Texas Intermediate losing 1.66% to $58.85 a barrel, while Brent crude lost 1.49% to $64.56 a barrel.