US open: Stocks mixed as Monte dei Paschi state bailout looms

US stocks were mostly down on Tuesday, as investors monitored the plight of Italy’s banks, while a state bailout for its oldest looms.

The Dow Jones Industrial Average was down 0.1% to 19,197.12 points, the S&P 500 slipped 0.01% to 2,204.45 points, but the Nasdaq gained 0.22% to 5,320.44 points at 1505 GMT.

Europe’s main indices were on the front foot as banking stocks in Italy recovered from the heavy losses suffered on Monday after Prime Minister Matteo Renzi conceded defeat in the referendum and announced his resignation.

Milan’s FTSE MIB index was up 2.03%, while Reuters reported that Rome was preparing a state bailout for the world's oldest bank Monte dei Paschi di Siena, which needs to raise €5bn by the end of December to avoid being wound down.

Michael Hewson, chief market analyst at CMC Markets, said: “Italy’s largest bank Unicredit has resumed its upward momentum from last week despite concerns it may have to raise an extra €13bn in extra capital in the coming weeks, though Monte dei Paschi’s share price remains under pressure. Banks across Europe have also enjoyed a similarly positive session as investors adopt a fairly sanguine outlook to events in Italy.”

He added: “Though stock markets remain complacently untroubled bond markets are also showing signs of a slightly more sanguine outlook as well with Italian two-year yields slipping back another four basis points to their lowest levels in over a week.”

On the data front, the US trade deficit widened to $42.6bn in October, from $36.2bn the previous month, and was larger than the $42bn expected.

Exports dropped by $3.4bn month-on-month to $186.4bn, as imports increased by $2bn to $229bn.

New factory orders increased 2.7%, following an upwardly revised 0.6% rise in September, which was the biggest gain in 18 months. Economists had expected a 2.6% surge.

Durable goods orders were up 4.6% in October, from 4.8% the previous months, and well ahead o 3.4% consensus forecast.

While non-farm productivity, a measure of goods and services made per hour, was flat at a seasonally adjusted 3.1% in the third quarter, below the 3.3% consensus forecast.

In currency markets, the dollar was trading up 0.37% to 0.9324 versus the euro. It was rose 0.19% to 114.07 against the yen but fell 0.03% to 0.7853 versus sterling.

In commodity markets, oil prices were softer following gains in the previous session after an agreement was reached for an OPEC-led production cut.

Brent crude was down 1.74% to $54 per barrel, while West Texas Intermediate was lower by 2.08% to $50.73 at 1446 GMT.

Gold on Comex slipped 0.06% to 1,175.80 per troy ounce at 1448 GMT.

In corporate news, Boeing fell 0.54% after President-elect Donald Trump tweeted that an order for a new Air Force One plane should be cancelled due to increasing costs.

TherapeuticsMD surged 11.51% as the drug developer announced positive data late on Monday from a menopause drug trial.