US open: Dow trades above 26,000 for first time; Citigroup earnings in focus
US stocks were at record highs in early trade on Tuesday as the Dow breached the 26,000 level for the first time, with sentiment underpinned by earnings from the likes of Citigroup and UnitedHealth.
At 1520 GMT, the Dow Jones Industrial Average was up 1% at 26,057.32, setting a fresh intraday record above 26,000, while the S&P 500 and the Nasdaq were up 0.6% and 0.8% at 2,803.90 and 7,319.18, respectively.
In corporate news, Citigroup rose following the bank's quarterly earnings. Although it posted an $18.3bn loss for the last three months of 2017 due to a $22bn accounting charge, investors welcomed news that it was sticking to its promise to pay out at least $60bn to shareholders over three years.
Long Blockchain rallied after announcing that it has entered into a letter of intent to be bought by Slater Blockchain in an all-share deal.
Merck was sharply higher after a trial showed that its Keytruda drug in combination with two other chemotherapy drugs was successful as a first-line treatment for lung cancer.
GM was in the black even as it said 2018 earnings are likely to be flat, with higher profit expected the year after, while UnitedHealth rose in after the insurer's quarterly earnings beat expectations.
Car retailer AutoNation advanced after saying it will use savings from the new US tax system towards retirement and cancer benefits for employees, while shares in USA Compression edged higher as it said it will buy Energy Transfer Partner LP's compression business in a $1.8bn deal.
Going the other way, General Electric lost ground after saying that a review of GE Capital’s insurance portfolio would result in a $6.2bn after-tax charge in the fourth quarter.
US-listed shares of BP gushed lower after the oil giant said it expects to take a post-tax non-operating charge of around $1.7bn in the fourth quarter as part of the class action settlement of the disastrous Deepwater Horizon oil well spill in the US in 2010.
On the macroeconomic front, results of a widely-followed regional gauge showed factory sector activity in the jurisdiction of the Federal Reserve bank of New York cooled a tad in January.
The Empire State index slipped from a reading of 19.6 for December to 17.7 in January, versus economists' forecasts for a reading of 18.5.
Sub-indices linked to new orders and shipments fell by 7.1 and 9.1 points each to 11.9 and 14.4, respectively. Meanwhile, a gauge referencing levels of staffing dropped by 19.1 points to 3.8. On the flip side, a sub-index tracking inventory levels jumped by 12.4 points to reach 13.8.
Ian Shepherdson, chief economist at Pantheon Macroeconomics, said: "On the face of it, these data suggest that the national ISM manufacture index will drop to about 57.5 from 59.7, but we think the Empire State numbers likely overstate the impact of the weather on the national picture. In any event, we see no reason to expect any sustained weakening in the manufacturing surveys."