US open: Stocks rally as earnings season begins

US stocks rallied on Monday as investors looked ahead to the start of the earnings season.

At 1439 BST, the Dow Jones Industrial Average rose 0.54%, the S&P 500 climbed 0.50% and the Nasdaq edged up 0.46%.

With little in the way of economic data, traders awaited corporate earnings and a meeting between Federal Reserve Chair Janet Yellen and President Barack Obama at 2000 BST.

Aluminium producer Alcoa's first quarter results are expected to the main event on the corporate front.

"Later today after the US close Alcoa will be releasing their quarterly earnings and therefore kicking off the US earnings season,” said Markus Huber, a trader with broker City of London Markets.

“This might just offer markets a chance to turn at least temporarily the main focus away from economic growth worries and therefore provide markets with some support in the days ahead should earnings news surprise to the upside.”

Deutsche Bank strategist Jim Reid said: “It's hard to argue against overall street expectations for this quarter being particularly low and the interesting reports this week will more than likely come out from the banks which are expected to be a front runner for negative earnings growth this period.”

Meanwhile, Yellen and Obama will discuss the US and global economy, Wall Street reform and the economic outlook when they meet later.

Fed official William Dudley is due to speak at the Association for Neighborhood and Housing Development conference in New York at 1425 BST.

Fellow Fed policymaker Robert Kaplan will take part in a moderated discussion at Louisiana Tech University in Ruston at 1800 BST.

The market will likely be monitoring comments from the Fed officials for any clues on the timing of the next interest rate hike.

Elsewhere, China stocks gained as data showed the consumer price index rose 2.3% year-on-year in March, falling shy of forecasts for 2.4% growth and remaining in line with the previous month.

The producer price index fell 4.3% in March from a year ago, compared to analysts’ estimates for a 4.6% decline and a 4.9% drop in February.

“Looking ahead, we expect consumer price inflation to remain near current levels for the rest of this year,” said Julian Evans-Pritchard, China economist at Capital Economics.

“Admittedly, the fall in oil prices during the second half of 2015 will boost energy inflation later in the year and looser monetary and fiscal policy should also support broader price pressures. That said, the recent rise in pig numbers suggests that pork price inflation should begin to ease before long, which will help keep a lid on inflation.”

In commodities, oil prices reversed earlier declines after data from Baker Hughes showed US energy firms had cut oil rigs by eight to 354 in the latest week. The data comes ahead of a 17 April meeting between global producers on whether to cap output.

West Texas Intermediate crude increased 0.94% to $40.10 per barrel and Brent crude gained 1.01% to $42.37 per barrel at 1437 BST.

In currencies, the dollar was trading up 0.23% versus the safe-haven yen, after slipping below the Y108 level in Tokyo trading.

In corporate news, Yahoo’s shares edged higher after Daily Mail parent Daily Mail and General Trust confirmed it was in discussions to buy its assets.

Hatteras Financial Corp. advanced after Annaly Capital Management announced a deal to buy the real-estate investment trust for about $1.5bn.