US open: Stocks higher following Apple earnings, investors await Fed decision

US stocks were slightly higher on Wednesday with the tech-heavy Nasdaq gaining from well-received earnings from Apple, while the Federal Reserve seemed likely to hold interest rates steady.

On opening the Nasdaq Composite Index rose 0.7% to 5,653 following upbeat Apple earnings.

The Dow Jones Industrial Average rose 0.08% to 19,879.84, the S&P 500 was down 0.07% to 2,277.32 and the Nasdaq was up 0.28% to 5,630.33 at 1624 GMT.

Investors were also eyeing the latest rate decision from the Fed following its first monetary policy meeting since Donald Trump’s inauguration. The central bank is likely to resist hiking interest rates following the end of its two-day meeting on Wednesday, in order to gain greater clarity over President Trump’s proposed stimulus policies.

The Fed will release a statement at 1900 GMT and Fed chair Janet Yellen will appear before congress on 15 February with the minutes of this week’s meeting published on 22 February.

Michael Hewson, chief market analyst at CMC Markets, said: “US markets have regained their footing today opening higher, helped by a bumper earnings announcement from Apple and a forecast busting ADP payrolls report for January, which saw 246,000 new jobs added, well above expectations.

“The dollar has also rebounded after the sharp jump in the latest ADP payrolls report for January, and ahead of this evening’s latest FOMC [Federal Open Market Committee] rate decision. A sharp rise in yields has also helped underpin the dollar, however it would be wrong to attribute this solely to the dollar’s rebound given similar rises in UK and German yields as well, driven primarily by today’s improvement in economic data.”

Meanwhile, oil prices were on the front foot, with West Texas Intermediate up 1.1% to $53.45 a barrel and Brent crude 1.4% higher to $56.40.

Gold on comex fell 0.56% to 1,204.60 per troy ounce.

In currency news, the dollar was down 0.49% against the pound to 0.7910, but was up 0.4% versus the euro to 0.9298 and 0.67% stronger against the yen to 113.56.

On the corporate front, Apple shares pushed 5.74% higher after the company said on Tuesday that net sales in the last three months of 2016 were up 3% on the previous year to $78.4bn, marking the strongest quarter ever. Other tech stocks got a boost, with Facebook and Alphabet also in the green.

On the downside, Automatic Data Processing dropped 5.18% after the New Jersey-based company beat second quarter earnings estimates, but fell short of revenue forecasts.

Tupperware Brands was down 4.62% after topping fourth quarter earnings forecasts, but revenue came in below the consensus.

Altria Group fell 0.89% after beating fourth quarter earnings estimates but the tobacco giant but was cautious in its guidance for the year.

MetLife and InterActiveCorp (IAC) are due to release numbers after the close.

On the data front, the ADP employment report, widely seen as a precursor to Friday’s non-farm payrolls, revealed that private sector employment in the US grew a lot more than expected in January.

Employers added 246,000 jobs last month, beating forecasts for a more modest 165,000 increase. Meanwhile, private payroll gains for December were revised down to 151,000 from a 153,000 gain initially reported.

Small businesses with fewer than 50 employees accounted for 62,000 of the jobs added to the economy, while medium-sized businesses with between 50 and 499 staff added 102,000 jobs, and large businesses accounted for an extra 83,000.

Markit’s manufacturing purchasing managers’ index came in at in at 55.0 in January, this was just below the 55.1 forecasts, and was unchanged from the previous month.

The ISM manufacturing purchasing managers’ index rose to a reading of 56.0 in January from 54.5 in December, and a point above the consensus of 55.0.