US stocks opened higher than expected as favorable data is signaling stable trend in US economy. Pullback in Treasury yields and a sharp intraday bounce in Chinese stocks was noted which helped gave investors confidence.
Adding to that the durable goods data report was exceeding forecasts mainly because of aircraft and car industry. The better than expected news on housing prices also influenced stock prices.
Dow Jones Industrial average rose by 0.48% aiming to offset a 0.9% decline on Monday. The Standard & Poors 500-stock index climbed 14 points, or 0.5%, while the Nasdaq Composite Index gained 0.38%. Durable-goods orders for May rose 3.6% from April, beating expectations for a 3.2% increase. Housing and consumer confidence both record surprisingly high levels.
Stocks have been struggling lately, and Treasury yields have soared, amid growing fears the Fed could begin scaling back its bond purchasing policies as early as this year.
In corporate news, PulteGroup Inc., home constructing company added 6% as an S&P 500 index of homebuilders jumped 3.8%. JPMorgan Chase & Co. and Bank of America Corp. gained at least 1.5% as financial sector surged. Walgreen Co. sank 7.2% after posting disappointing quarterly profit report. Netflix Inc. lost 2.5% after the company was downgraded by Sanford C. Bernstein & Co. to “underperform” rating.
Carnival Corp. reported almost tripled second-quarter profit , 5 cents a share from 2 cents a share in the year-ago period. Company is up around 2% of share price.
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