US open: Stocks rise as China trade surplus widens, oil prices recover

US stocks rallied on Wednesday after better-than-estimated China trade data soothed concerns about the slowdown in the world’s second largest economy.

The Dow Jones Industrial Average rose 0.93%, the Nasdaq increased 1.44% and the S&P 500 climbed 1.06% at 1430 GMT.

China’s trade surplus grew to 382.05bn yuan in December from 343.10bn yuan in November, beating analysts’ forecasts of 338.80bn yuan.

Exports rose by 2.3% in December following a 3.7% dip a month earlier. Economists had pencilled in a 4.1% drop.

Imports declined 4% last month, compared to analysts’ estimates for a 7.9% fall and November’s 5.6% slide.

“China’s trade data for December support our view that, despite the turmoil in Chinese financial markets, there has not been a major deterioration in its economy in recent months,” according to Capital Economics.

“Meanwhile, another large trade surplus last month provides a cushion for the People’s Bank in the face of soaring capital outflows.”

The People’s Bank of China fixed the yuan at 6.5630 to the dollar on Wednesday, marking the fourth day that the central bank has kept its yuan guidance roughly stable.

The yuan traded at 6.5752 to the dollar in the offshore market, slightly stronger than 6.5770 late Tuesday.

In another boost to the market, oil prices recovered from Tuesday’s declines. At 1413 GMT, West Texas Intermediate crude rose 2.6% to $31.23 per barrel and Brent increased 2.1% to $31.52 per barrel.

US mortgage applications for the week of January 8 rebounded 21.3% according to the Mortgage Bankers Association.

Other economic data out today includes US oil and gas inventories at 1530 GMT, as well as the monthly budget statement and the beige book at 1900 GMT.

The dollar was up against all the main currencies, rising 0.25% against the pound, 0.26% against the euro and 0.42% against the yen. Spot gold was down 0.20% to $1,084.39.

In company news, Supervalu jumped after posting a drop in third quarter net earnings as sales edged down in line with forecasts.

KFC’s parent company Yum! Brands gained after it reported on Tuesday that sales at its restaurants in China rose by around 1% in December, compared to its 3% decline the previous month.

Rail giant CSX Corp. rose as it reported third quarter earnings that beat analysts' expectations.