US open: Stocks rise as confidence in the global economy grows

US stocks advanced on Monday, as speculation suggested Chinese interest rates could be cut again and confidence in the global economy grew.

Just before 10:00 in New York, the Dow Jones Industrial Average rose 0.13%, while the S&P 500 was up 0.08% and the Nasdaq advanced 0.24%.

China is reportedly set to cut rates further and loosen lending restrictions amid concerns about falling inflation.

On 21 November, the People’s Bank of China’s announced it was slashing rates for the first time in two years.

“The PBoC decision to cut interest rates on Friday morning for the first time in two years has really given the markets a boost, particularly as people had not expected the central bank to take such bold measures,” said Alpari UK analyst Craig Erlam.

“Targeted stimulus measures had been touted and even an injection of cash, but not a cut in interest rates which potentially shows just how concerned the PBOC is about growth and, maybe even more so, the inflation outlook.”

Meanwhile, the president of the European Central Bank, Mario Draghi, said that, were inflation too remain low for an extended period of time, the ECB might implement bond buying.

“ECB quantitative easing is not guaranteed, but there is a higher probability that it will go ahead, given the Bank’s mandate is to maintain price stability,” said Jamie Brownlee, director at Citigate Dewe Rogerson.

“The ECB has done more than many could have imagined over the past few months, and we should expect the Bank to continue with growth supportive policies.

“Meanwhile, fiscal policy should be less of a drag on growth in 2015, as the European Commission forecasts a slight easing for the region in aggregate.”

In corporate news, Tetraphase Pharmaceuticals rallied after reports emerged the company was exploring a sale, while Platinum Underwriters Holdings jumped over 20% after the reinsurer said RenaissanceRe Holdings will buy it for about $76 per share.

Best Buy advanced ahead of Black Friday on 28 November, while Tesla Motors gained after its chief executive said the electric-car maker planned to cooperate with BMW on battery technology and charging stations.

The dollar slid against the pound and the euro, but rose against the yen, while gold futures dropped marginally to $1.197.70.

The prices of oil opened the week of a negative note, with Brent crude and West Texas intermediate both losing more than 0.5% and trading at just under $80 and just over $76 a barrel, respectively.

The yield on the 10-year US Treasury note rose two basis points to 2.33%, while the yield on the 30-year note advanced by the same margin to 3.04% and the yield on the five-year Treasuries advanced two basis points to 1.63%.