US open: Strong start on the Street as GDP tops estimates
Wall Street trading began on a positive note on Wednesday, with investors looking over the latest GDP release.
At 1540 BST, the Dow Jones was 0.02% higher at 26,069.18, while the Nasdaq moved ahead 0.49% to 8,069.10 and the S&P 500 was 0.25% firmer at 2,904.89 - an intraday record.
Stocks rallied to fresh highs on Monday on the back of news that the US had agreed to a preliminary trade deal with Mexico, and although Tuesday's gains were only marginal, they still left the S&P and Nasdaq close to record highs.
Oanda analyst Craig Erlam said: "With NAFTA negotiations finally making progress, there is a sense of relief that the risk of a global trade war is easing, which has been supportive for sentiment recently. There is still a long way to go with Trump recently again threatening tariffs on cars from Europe and the US preparing another $200bn of tariffs against China but any progress is welcome and it’s hopefully something we’ll see more of in the months ahead."
Erlam noted that the Canadian dollar has gained ground in recent days on reports that it is re-joining talks and offering concessions that could result in an agreement by the end of the week.
"Trump had previously threatened to proceed with a US-Mexico trade agreement as a replacement for NAFTA, in effect cutting Canada out, which could have had a significant impact on the Canadian economy. While this was more than likely a bluff aimed at forcing the hand of the Canadians, it is a relief that no such move will likely be necessarily as it would have been harmful for all concerned."
In corporate news, Hewlett Packard was up 1.31% after its third-quarter earnings late on Tuesday topped expectations.
Software company Box Inc slumped 10.22% in early trade despite better-than-expected quarterly earnings, as its guidance fell short of analysts' estimates.
Elsewhere, Salesforce was up 0.57% ahead of its earnings later in the day, while cannabis producer Tilray was 17.48% higher in after it said in its first earnings release since its IPO in July that second-quarter sales nearly doubled.
On the data front, the US economy grew slightly more quickly than forecast over the three months to June, following upwards revisions to estimates for business investment and private inventories.
According to the Department of Commerce, America's gross domestic product accelerated to a quarterly annualised clip of 4.2% to reach $18.514trn, which was up from the 4.1% pace observed over the first three months of 2018.
A preliminary reading on import demand was also marked down, further boosting the estimated rate of GDP growth.
Economists had been anticipating a slight downwards revision in the rate of GDP growth to 4.0%.
Elsewhere, fewer Americans signed contracts to buy homes last month, with real estate sales continuing to slip despite solid economic growth.
The National Association of Realtors' pending home sales index fell 0.7% last month to 106.2. Over the last twelve months, contract signings have tumbled 2.3% as home values climbed at roughly double the rate of average wage growth across the US.