US open: Basic Resources pace gains as Moody's raises outlook on China's debt

Wall Street's main market averages were seeing slight gains despite weak economic data with shares of Basic Resource names pacing the advance despite an overnight downgrade of China's debt by a leading ratings agency.

At 1535 BST, the Dow Jones Industrial Average was 0.15% or 32.09 points higher to 20,969.18, alongside gains of 0.14% or 8,52 points to 6147.99 for the Nasdaq and a rise of 0.09% or 2.10 points to 2,400.52.

"US stocks opened slightly higher and remain in the vicinity of record high territory. Wall Street has recouped last Wednesday’s sudden losses but needs a catalyst to take the next leg up. Fed minutes and the OPEC meeting are two such potential catalysts. Overall economic growth looks supportive or more market gains. Despite the debt worries, China’s growth has been stable, Donald Trump’s growth agenda is down but not out and European growth is picking up some of the slack," said Jasper Lawler, senior market analyst at LCG.

From a sector standpoint, the biggest gains were to be seen in the following industrial groups: Coal (2.43%), Basic Resources (1.41%), Commodity chemicals (1.34%), Retail REITs (1.25%) and Industrial metals (1.17%).

Overnight, Moody's downgraded China's long-term credit rating by one notch to A1 from Aa3 but also changed its ratings 'outlook' to stable from negative.

Investors were also waiting on the minutes of US rate-setters' last policy meeting for clues about the future pace of tightening. Speeches from Fed officials Robert Kaplan and Neel Kashkari were also scheduled.

Acting as a backdrop, West Texas Intermediate crude oil futures were little changed even after the Department of Energy reported a larger than expected decline in US oil stockpiles.

Existing home sales in the States fell 2.3% on the month in April to reach an annualised rate of 5.57m (consensus: 5.70m)

Home prices in the US rose at a 0.6% month-on-month clip in March according to FHFA, as expected.

On the corporate front, stock in Bunge was slightly weaker on news that Glencore has approached the grain trader about a potential takeover.

Shares in retailer Lowe's on the other hand tumbled after its first-quarter earnings missed analysts' expectations, but chip maker Nvidia was on the front foot following a report that Japan's SoftBank has racked up a $4bn stake in the company.

Jewellery retailer Tiffany was knocked lower after reporting a much weaker-than-expected 3% drop in global like-for-like sales.

Women's fashion retailer Chico FAS dropped 11% amid heavy trading volumes after disappointed investors got rid of their shares following the company's first fiscal quarter results and outlook.

Dow Jones - Risers

Coca-Cola Co. (KO) $44.65 0.59%
E.I. du Pont de Nemours and Co. (DD) $77.78 0.57%
General Electric Co. (GE) $28.43 0.53%
Procter & Gamble Co. (PG) $86.54 0.53%
Boeing Co. (BA) $184.40 0.50%
United Technologies Corp. (UTX) $122.63 0.46%
Goldman Sachs Group Inc. (GS) $220.48 0.38%
Visa Inc. (V) $94.19 0.35%
3M Co. (MMM) $198.35 0.31%
Intel Corp. (INTC) $35.95 0.24%