US open: Stocks rally following variant fuelled sell-off in previous session

Wall Street stocks were sharply higher early on Tuesday as major indices looked set to crawl back some of the heavy losses recorded in the previous session.

As of 1535 BST, the Dow Jones Industrial Average was up 1.38% at 34,430.09, while the S&P 500 was 1.06% firmer at 4,303.64 and the Nasdaq Composite came out the gate 0.68% stronger at 14,372.47.

The Dow opened 468.05 points higher on Tuesday, more than halving losses recorded in the previous session, its worst performance in eight months, as concerns regarding the spread of the Covid-19 delta variant saw market participants offload equities en masse.

Rising coronavirus cases were in focus again on Tuesday, with the delta variant spreading, predominately among the unvaccinated, and the US now averaging about 26,000 daily cases over the last seven days - more than double the average number seen in mid-June.

Also in focus, the yield on the benchmark 10-year Treasury note was still hovering around a five-month low at roughly 1.18%.

In the corporate space, Halliburton posted a second-quarter net income of $227.0m, up from $170.0m recorded in the first quarter, while total revenues ticked up from $3.5bn to $3.7bn as both North America and international markets continued to improve, while tobacco giant Philip Morris International posted a second-quarter net income of $2.17bn on Tuesday, up from $1.95bn a year earlier, but also outlined adjusted revenues of $7.59bn which fell short of expectations for $7.67bn.

Still to come, Chipotle, Netflix and United Airlines were all slated to report after the close.

On the macro front, US homebuilding activity bounced back last month but forward-looking indicators pointed to weakness ahead. According to the Department of Commerce, housing starts grew by 6.3% month-on-month in June to reach an annualised rate of 1.64m, ahead of consensus estimates for a print of 1.59m.

Going the other way, building permits fell by 5.1% to 1.59m, and May's print for housing starts was revised lower to a pace of roughly 1.55m from 1.57m.