US open: Stocks climb as BoA's third quarter profit rises

US stocks were in the green on Monday as the Bank of America posted a rise in profits while US industrial production returned to growth.

At 1537 BST, the Dow Jones Industrial Average and the S&P 500 were both up 0.3%, while the Nasdaq rose 0.4%.

Meanwhile, oil prices retreated after data from oil field service company Baker Hughes showed the number of active US oil rigs last week rose by four to 432.

Brent crude was down 0.97% to $51.45 a barrel while West Texas Intermediate was lower by 1.3% to $49.70 at 1452 BST.

Shares in Bank of America were up 0.5% as it reported third quarter profit unexpectedly increased as expenses fell and bond trading rose.

Revenue rose 3% to $21.64bn, ahead of the $20.97bn anticipated by analysts.

US industrial production rose 0.1% in September following a revised 0.5% fall in August, according to the Federal Reserve. Analysts expected a 0.2% gain.

In contrast, the Empire State manufacturing index fell to -6.8 in October from -2 in September, which was below the consensus +1.

The new orders index edged up but remained negative at -5.6, suggesting an ongoing fall in orders, and the shipments index rose to -0.6.

Paul Sirani, chief market analyst at Xtrade, said news that industrial production has returned to growth is the latest encouraging piece of data to come out in recent weeks, while it was also a positive considering the strength of the dollar and China’s weakening trade demands.

He added: “There’s more than one box to tick this week, though, and tomorrow’s consumer price index will be closely observed. Federal Reserve Chair Janet Yellen knows that she needs to cool off the world’s largest economy sooner rather than later, and anything better than expected tomorrow firms up the likelihood of a December hike, and also keeps a pre-election rate rise in the picture.”

Naeem Aslam, chief market analyst at Think Markets, said: “What we have today is very much negative data from the US and this is impacting the sentiment in the market. Investors are not thrilled that the Fed is going to increase the interest rate in December – as the odds are highly skewed towards this side.

“If you look at the economic data, the US empire state manufacturing number, it tells you that things are very feeble. The number fell to -6.8 which is really shocking and industrial production number just added the cherry on top by missing the forecast of 0.3% when the actual number printed 0.1%.”

September’s consumer price index will be published on Tuesday at 1330 BST.