US open: Stocks climb as Goldman Sachs quarterly profit beats forecasts

US stocks rose on Tuesday as banking giant Goldman Sachs reported a rise in quarterly earnings and as data revealed inflation increased in line with expectations in September.

At 1503 BST, the Dow Jones Industrial Average was up 0.41%, the S&P 500 rose 0.56% and the Nasdaq climbed 0.93%.

Oil prices also advanced with West Texas Intermediate up 0.97% to $50.43 a barrel and Brent crude rose 0.88% to $51.98 at 1425 BST.

Shares in Goldman Sachs rose 2.3% as it reported that third quarter profit grew to $2.09bn, or $4.88 a share, compared to $1.43bn and $2.90 a share last year.

Revenue increased to $8.17bn from $6.86bn while analysts from Thomson Reuters expected the bank to earn $3.82 a share on revenue of $7.42bn.

It followed better-than-expected results from Bank of America on Monday, providing a boost to confidence in the US banking sector.

Meanwhile, inflation rose in line with expectations in September due to a rise in housing and energy prices.

The consumer price index climbed 1.5% year-on-year, its biggest yearly rise since October 2014 as expected by analysts, following a 1.1% increase in August.

Inflation edged 0.3% in September after a 0.2% gain in August, as forecast.

Ian Shepherdson, chief economist at Pantheon Macroeconomics, said: “Headline inflation has risen to 1.5% from zero over the past year, and it will continue to climb rapidly as last year's declines in energy prices drop out of the calculation. We expect to see a 2.5% rate by next February, by which point we think surveys of inflation expectations will have risen significantly.”

The inflation data could prompt Fed Reserve Chair Janet Yellen to raise interest rates sooner rather than later.

“Yellen will want to take some of the heat out of the strong economy and clamping down on inflation will surely be a priority, with the December policy meeting looking more and more likely to bring an announcement”, Paul Sirani, chief market analyst at Xtrade, said.

“With global uncertainty still swirling, oil prices rising and a contentious presidential election on the horizon, the Fed raising interest rates would be welcomed by many.”

On companies, shares in tobacco firm Philip Morris International rose 1.17% as its third quarter earnings beat forecasts, while pharmaceutical giant Johnson & Johnson’s shares fell 1.17% even as it posted third quarter results that exceeded estimates.

Shares in Domino's Pizza rose 4.95% as the company posted a 25% jump in profit in the last quarter due to strong sales.

Looking ahead, results for Intel Corp and Yahoo are due after close.

On Wednesday the Fed’s John Williams is due to speak in New Jersey at 1345 BST and MBA mortgage applications data are released at 1200 BST.