NEW YORK: US stocks opened on an upbeat note Tuesday amid another raft of earnings reports and more signs the housing market is slowing from its torrid pace.
But a Wall Street rally on Monday petered out by the end of the session, and analysts note there are competing pressures on share prices, including a report that iPhone-maker Apple plans to slow hiring and spending.
The Commerce Department reported a two percent drop in new US home construction projects started in June amid rising costs and mortgage rates that are causing demand to dry up.
Investors could be feeling better about the data and the news of US average gas prices falling below $4.50 a gallon, which could mean the Federal Reserve would not have to raise lending rates as fast or as far to cool sky-high inflation.
The market “is finding comfort these days in the notion that bad economic news could ultimately translate into fewer, or less aggressive, rate hikes,” Briefing.com analyst Patrick J O’Hare said.
Easing rate-hike bets, bank earnings lift Wall Street
But, he cautioned, “one has to work with a conditional verb tense there, because inflation is still an untamed beast.”
About 30 minutes into the trading session, the Dow Jones Industrial Average had gained more than one percent to 31,072.61.
The broad-based S&P 500 rose 1.2 percent to 3,878.38, while the tech-rich Nasdaq Composite Index increased 1.3 percent to 11,506.21.
IBM fell 7.4 percent after the company reported earnings that topped estimates, but warned of headwinds that would hit its cashflow.
Meanwhile, Johnson & Johnson rose 0.7 percent after its results beat expectations.
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