US open: Stocks gain on oil price rebound, earnings season

US stocks gained on Tuesday as oil prices rebounded and Alcoa kicked off the new earnings season with better-than-expected second quarter results.

At 1450 BST the Dow Jones Industrial Average rose 0.61%, the S&P 500 increased 0.65% and the Nasdaq climbed 0.74%.

At the same time oil prices rose on a weaker dollar with West Texas Intermediate crude up 2.5% to $45.95 per barrel and Brent up 3.1% to $47.74 per barrel at 1452 BST.

The dollar fell 1.12% against the pound and dropped 0.24% versus the euro at 1522 BST

Shares in Alcoa continued to rally a day after the aluminium reported quarterly earnings and revenue that surpassed analysts’ forecasts.

Fastenal, on the other hand, slumped after reporting an unexpected drop in second quarter profit.

Later this week major banks are due to report including JP Morgan Chase & Co., Citigroup and Wells Fargo & Co.

In other company news, Shire rallied after the US Food and Drug Administration approved its lifitegrast eye drops for treating signs and symptoms of dry eye disease.

Seagate Technology surged after it announced late on Monday that it will cut 6,500 jobs globally, or around 14% of its workforce.

Meanwhile, St. Louis Fed President James Bullard on Tuesday reiterated in a speech that he reckons only a single interest rate increase will be needed for the foreseeable future.

Fellow Fed official Daniel Tarullo urged better regulation of short-term funding both inside and outside the banking system in a separate speech on Tuesday in Washington.

In economic data, NFIB’s small business optimism index rose to 94.5 in June from 93.8 a month earlier, beating expectations for 94.0.

US wholesale inventories rose 0.1% in May compared to a month ago, the Department of Commerce said, following an upwardly revised 0.7% increase in April. Analysts had expected a 0.2% gain.

The Labor Department revealed in its Job Openings and Labor Turnover Survey that the number of job openings fell by 345,000 to 5.5m in May, driven by a decline in the private sector. The job openings rate was at 3.7% in May.

The number of hires was little changed at 5m at a rate of 3.5%. Hiring within private and government were broadly stable.

Elsewhere, investors were also looking ahead to Thursday’s Bank of England rate announcement amid growing expectations of a rate cut in the wake of the UK’s decision to leave the European Union.

Bank of America Merrill Lynch said it expects the BoE to cut interest rates by at least 25 basis points, saying the central bank had nothing to gain by waiting.

The tone was also underpinned by news that Theresa May was set to succeed David Cameron as Prime Minister of the UK this week.