US open: Dow rebounds slightly after hitting lowest level in five months

US stocks edged higher on Wednesday, the day after the Dow Jones suffered its worst session in five months.

Just before 10:00 in New York, the Dow Jones Industrial Average was up 48.7 points, while the S&P 500 and the Nasdaq gained four and six points respectively.

The DJIA lost over 330 points on Tuesday, as a strong dollar and a decline in oil prices saw the index hit the lowest level since 9 October.

The dollar continued its rise, gaining over 1% on the euro and 0.44% and 0.16% against the pound and the yen respectively, while gold futures fell 0.23% to $1,157.40.

“The dollar at twelve year highs versus multiple major currencies and US, UK and German equities at all-time highs create unease about holding on through market dips on the fear it could finally be the top," said CMC Markets analyst Jasper Lawler.

Investors were buoyed by a positive reaction from across the Atlantic, where, in the third day the European Central Bank's quantitative easing programme, the Stoxx Europe 600 index rebounded after losing 0.9% in the previous session.

Speculations that the Federal Reserve could hike interest rates earlier than expected contributed to worry investors.

"With the labour market still evidently on fire in February, we expect the FOMC statement next Wednesday to omit the language that the Fed can be "patient" in beginning to normalise monetary policy," said analysts at Capital Economics.

"Even with headline inflation below zero, we then anticipate a first hike in June, with the FOMC pushing the target range for the fed funds rate to 1.00-1.25% by the end of this year."

In company news, electronic payment solutions group VeriFone Systems jumped 6% despite reporting late Tuesday that its outlook fell below Wall Street forecasts.

Food manufacturer General Mills was largely stable after announcing on Tuesday that it will raise its quarterly dividend by 7%.

Krispy Kreme Doughnuts edged 0.3% lower in early trading, while restaurant chain Shake Shack Inc fell 1.35%. Both companies are set to be closely watched on Wednesday as they will report earnings after the close.

After falling sharply on Tuesday, oil prices staged a timid recovery, with West Texas Intermediate crude rising 0.29% to $48.43 a barrel, while Brent crude gained 0.6% to $56.73.