US open: Stocks gain after better-than-expected US GDP data
US stocks rose on Tuesday as data showed the nation’s economy slowed less than originally estimated in the first quarter.
At 1459 BST, the Dow Jones Industrial Average climbed 1.20%, the S&P 500 edged up 1.28% and the Nasdaq gained 1.75%.
At the same time, oil prices advanced, with West Texas Intermediate up 2.9% to $47.74 a barrel and Brent crude up 2.7% at $48.49. Prices were supported by the possibility that oil and gas workers in Norway could go on strike from Saturday if they do not agree a wage deal.
In economic data, the Commerce Department said first quarter US gross domestic product increased 1.1%, beating consensus expectations of 1% growth and higher than the previously-estimated 0.8% increase. In the final quarter of 2015, real GDP rose 1.4%.
“Fed Chair Janet Yellen will be largely content with the GDP figures released today that reveal a US economy in decent health amid swirling global uncertainty,” said Dennis de Jong, managing director at UFX.com.
“The UK’s decision to vote to leave the EU last week has triggered market turmoil not seen since the dark days of 2008 and, while the US is likely to avoid bearing too much of the global burden, a strengthening dollar against the pound will have some knock-on effects."
US house price growth slowed just a touch in April, according to the S&P/Case-Shiller National Home Price Index, and the outlook is uncertain following Brexit and ahead of the US elections. The 20-City Composite Index was up 5.4%, down from 5.5% in March but in line with economists’ estimates.
US consumer confidence improved in June with the Conference Board’s sentiment index rising to 98.0 from 92.4 the previous month, exceeding analysts’ estimates for a reading of 93.5.
In corporate news, ReachLocal shares surged 169.09% after Gannett announced that it was buying the digital marketing company for $4.60 a share.
Shares of Tesla Motors rose after the electric car maker said on Monday that it will form a two-person committee of independent board members to evaluate its buyout offer for SolarCity.
Carnival Corp. jumped after the cruise operator reported fiscal second-quarter profit and revenue that beat analysts’ forecasts.
Regulus Therapeutics slumped after the biopharmaceutical company late Monday said the Food and Drug Administration has placed its investigational new drug for the treatment of chronic hepatitis C virus infection on clinical hold.
LendingClub Corp. edged higher after fintech company said it was cutting almost 200 jobs.