US open: Markets boosted by stellar GDP figures

US stocks were advancing on Tuesday after the Dow Jones Industrials reached record highs the night before.

Early in the day on Tuesday the Dow Jones Industrial Average rose 0.24% to 18,066.89 while the Nasdaq and S&P 500 were both increasing.

IG analyst Chris Beauchamp said: “Light volumes should provide an opportunity for another push higher, as the prospect of a third day of record highs is too tempting to pass up, especially given the shortened session in the US.”

US Initial Jobless Claims undercut consensus expectations of 290,000 by 10,000 week-on-week for 20 December.

Capital Economics noted: “Nonetheless, the main point is that the US economy is stronger now and more able to cope with any external shocks than at any time since before the recession. As such, we suspect that if our 3.0% 2015 growth forecast proves to be
wrong, it’s more likely to be because growth turns out to be higher.”

Analysts had welcomed decent GDP results on Monday.

“After finding itself in the midst of a minor rebound yesterday afternoon, following the better-than-expected US GDP data, Brent Crude has once more spent the day retracing its steps, slipping to $60.19 per barrel,” said Connor Campbell, financial analyst for Spreadex.

“With the USA announcing its final crude oil inventory before Christmas this afternoon, the commodity could be in for an ugly Eve if the figure looks too high.”

CMC Markets analyst Jasper Lawler added: “Consumer spending is likely to continue to drive the economy forward in 2015, especially if record low oil prices continues for a sustained period.”

Crude futures were receding early in the day as WTI crude futures opened around 2.826% in the red, or $55.55 barrel, and Brent futures opened at a loss of around 3.074%, or $59.85 a barrel.

“Oil prices are unlikely to rally straight back to $100 per barrel any time soon but equally it seems the 2008 low at $35 is not justified. Oil will sooner or later find a new equilibrium at lower prices, the base of which could be $60 or perhaps $50 per barrel,” said Lawler.

Over on COMEX, gold futures were dropping 0.37% to $1,173.70 while the dollar was falling against the pound, the yen and the euro.

The yield on a benchmark US 10-year Treasury went down two basis points to 2.29%.

Meanwhile, in the corporate world Chevron was decreasing by 1.33% as futures slid and Coca-cola was rising 0.47% in the Christmas retail rally.