US open: Small gains on the Street despite fears of another government shutdown

Wall Street trading began with some small gains on Monday as investors continued to eye trade relations between the US and China and considered the prospect of yet another government shutdown.

At 1500 GMT, the Dow Jones Industrial Average was up 0.02% at 25,112.50, while the S&P 500 moved ahead 0.11% to 2,710.87 and the Nasdaq traded 0.12% firmer at 7,307.17.

The Dow opened around 6 points higher as Sino-US relations remained in focus as discussions between the two nations were set to continue this week, with US Treasury Secretary Steve Mnuchin and US Trade Representative Robert Lighthizer headed off to Beijing for the next stage of talks.

Oanda analyst Craig Erlam said: "This week the US team will travel to Beijing for what is increasingly looking like deal-saving negotiations. An acknowledgement from Trump that no meeting is planned with Xi later this month has been widely taken as a signal that a deal is unlikely to be achieved, with best hopes now being that enough progress is made to warrant an extension to the deadline and avoid further tariffs.

"An agreement was always going to be very difficult within the 90-day period so if an extension is agreed on the back of promising progress then it's still encouraging."

Erlam pointed out that it's the negotiations at home where Trump appears to be making the least progress, as Democrats refuse to back down on funding for the border wall.

As the end of the three-week spending introduced on 25 January approaches, Erlam said: "With the blame for the previous shutdown having been levied at the President, the Democrats will likely feel comfortable seeing this through. Trump has been very good at the PR side of politics previously but this may be a challenge too far."

In corporate news, Morgan Stanley was 0.27% lower after agreeing to buy Canada's Solium Capital - a provider of software-as-a-service for equity administration, financial reporting and compliance - for around $900m in cash.

Irish-American industrial manufacturing group Ingersoll-Rand was down 0.35% as it agreed to buy Precision Flow Systems for $1.45bn.

Elsewhere, shares in Burger King parent Restaurant Brands collected 3.65% after the release of its fourth-quarter earnings and video games developer Electronic Arts shot up 8.81%, following on from Friday's surge.