US open: Strong earnings from McDonald's boost Dow

Wall Street trading opened on a positive note Monday, as a profit beat at fast food giant McDonald's helped boost sentiment ahead of a slew of data releases.

At 1530 BST, the Dow Jones Industrial Average was up 0.31%, while the S&P 500 and Nasdaq had gained 0.26% and 0.46%, respectively.

SpeadEx analyst Connor Campbell said: "The index’s 100 point climb did all ow the Dow to cross 24400; if it maintains those gains until closing time then it will close April around 300 points higher than where it started."

Deal news was in focus as T-Mobile and Sprint agreed a $26bn merger that would reduce the major US wireless providers to three from four. However, RBC Capital Markets said regulatory approval for the deal was likely to be challenging.

"We believe Department of Justice staff feel vindicated in blocking the AT&T/T-Mobile merger several years ago and would want to maintain a four-player market to preserve competitive behaviour, whereas a three-player market may be susceptible to coordinated effects," RBC said.

Elsewhere, refiner Marathon Petroleum agreed to buy rival Andeavor for more than $23bn in a deal that is expected to produce synergies of $1bn.

Walmart was up 2.51% as its UK unit, Asda, agreed to merge with London-listed supermarket retailer Sainsbury's.

David Cheetham, chief market analyst at XTB, said that while the UK's Competition and Markets Authority has already stated that the merger will "likely be subject to review", it appears unlikely that the deal will be blocked.

"A market share in the low 30-percents is a long way from monopolistic and given the intense competition in the sector, aptly highlighted by the emergence of Lidl and Aldi, as well as the fact that the new market share will not be that much more than the one currently enjoyed by the market leader Tesco, the CMA are unlikely to stand in the way and scupper the arrangement."

McDonald's gained 4.910% in early trading after menu price increases fueled higher first-quarter earnings.

Arconic tanked 12.43% after cutting its full-year profit forecast and AK Steel Holding lost 5.89% despite posting better than expected earnings.

On the data front, economic activity in the Chicago area improved a touch less than expected in April, according to figures released on Monday.

The MNI Chicago business barometer rose to 57.6 from 57.4 in March, snapping a three-month downward trend but still coming in below expectations for a reading of 57.9.

Elsewhere, a key measure of US inflation rose to the Federal Reserve's target for the first time in a year, lifting market expectations for future US interest rate rises.

Growth in March's personal consumption expenditures index picked up to 2% compared to a year ago, from a 1.7% pace in February, as economists expected. This was despite no change movement month-on-month between the headline PCE index.

Core PCE inflation, the Fed's preferred measure of inflation, reached 1.9% from 1.6%, in line with the market forecast, as the core PCE deflator rose 0.2% on the month.

Lastly, contracts to buy previously owned homes rose less than expected in March as a lack of properties for sale held back activity for another month, according to the National Association of Realtors.

The pending home sales index nudged higher to a reading of 107.6, up 0.4% from February and the second consecutive monthly rise. January's index was slightly downwardly revised to 107.2.