US open: Stocks mixed as oil prices recover

US stocks were mixed on Tuesday as oil prices recovered and US data came in better than expected.

The Dow Jones Industrial Average rose 0.22% and the S&P 500 gained 0.32% but the Nasdaq declined 1.07% at 1431 GMT.

Oil prices moved back above $30 per barrel after falling below that level earlier on Tuesday. At 1410 GMT, West Texas Intermediate increased 1.2% to $30.73 per barrel and Brent crude was up 1.3% to $30.91 per barrel.

“When we consider that the fundamental factors at play – increased Iraq output, the return of Iran to the market and another rout in China overnight – it would not be unreasonable to expect broad declines in oil today, given how this year has gone so far,” said Craig Erlam, senior market analyst at Oanda.

“Instead the dip has so far been bought which suggests to me that a move back towards $36.50 may be on the cards for both Brent and WTI.”

In economic data, S&P/Case-Shiller's 20-City Composite Index rose 5.8% year-on-year in three months ending November, compared to a 5.5% yearly gain in the period ending in October. It beat analysts’ expectations of 5.7% and marked the strongest reading since July 2014.

Still to come, Markit releases its services purchasing mangers’ index at 1445 GMT, while the consumer confidence report is due at 1500 GMT and the Richmond Fed manufacturing index is published at 1500 GMT.

Meanwhile, the market is eagerly awaiting the Federal Reserve’s latest interest rate decision on Wednesday. The Fed is expected to keep interest rates unchanged at 0.50% amid concerns about China’s flagging economy and a slump in oil prices. While no surprises are expected, the focus will be on the press statement released alongside the policy announcement for any clues on when the Fed will next raise interest rates.

Last month the Fed decided to lift interest rates by 25 basis points as the labour market improved and the economy recovered. It marked the first rate hike in nearly a decade.

“However, since then economic data have suggested that the first Fed rate hike of the cycle came in the midst of one of the weakest quarters in terms of US GDP growth since the middle of 2009,” Rabobank said.

“On top of that global headwinds in the form of concerns about growth in China and emerging market have not faded.”

The analyst expects the Fed will hike rates twice this year.

In company news, shares in Johnson & Johnson advanced as the company reported an increase in fourth quarter earnings.

Shares in Procter & Gamble were up after it reported earnings that were better than expectations, boosted by an increase in organic sales.

Freeport-McMoRan rallied after the mining and metals giant reported a better-than-forecast loss in the fourth quarter.

Apple declined as patent holder VirnetX demanded $500m (£351m) from the company, claiming it used intellectual property without permission. VirnetX claimed that Apple's own VPN technology, plus its FaceTime and iMessage services, all infringe on its patents.

The dollar fell 0.09% against the pound but rose 0.20% against the euro and 0.21% versus the yen.