US open: Stocks trade higher as lawmakers reach tentative deal to avert shutdown
Wall Street trading got off to a positive start at the open on Tuesday as investors welcomed news of a tentative deal to avert another government shutdown.
At 1450 GMT, the Dow Jones Industrial Average was up 0.92% at 25,284.65, while the S&P 500 had picked up 0.82% to 2,732.11 and the Nasdaq traded 0.92% firmer at 7,375.23.
The Dow opened more than 230 points higher on Tuesday as sentiment was boosted by news that Democrats and Republicans had reached an agreement in principle over border security that involves 55 miles of new border fencing and could avert another partial government shutdown.
In addition, trade relations between the US and China were also in focus, with investors increasingly hopeful after White House counsellor Kellyanne Conway said Donald Trump wanted to meet with Chinese President Xi Jinping "very soon" as the deadline on trade talks between the two nations looms.
Oanda analyst Craig Erlam said: "A deal to avoid another shutdown may resolve another unwanted distraction for the US but I'm not sure it was ever viewed as a major risk factor for the markets."
"Success in these negotiations will provide a welcome distraction for Trump and his team and draw any attention away from the failure to secure the full funding for the wall. Officials are in Beijing this week and appear optimistic that a deal can be agreed by the end of this month, despite recent suggestions that the two sides remain far apart."
In corporate news, Under Armour shares were up 2.31% at the open after the sportswear company's fourth-quarter earnings and sales surpassed analysts' expectations.
Elsewhere, brewer Molson Coors was down 6.41% following the bell after the release of its fourth-quarter numbers.
On the macro front, the latest data from the National Federation of Independent Business showed that small business sentiment in the US deteriorated more than expected in January amid worries about the government shutdown and financial market instability.
The small business optimism index fell to 101.2 from 104.4 in December, missing expectations for a reading of 103.2. This marked the lowest level for the index since the weeks leading up to the 2016 elections and remains well below the historical average of 98.
"Business operations are still very strong, but small business owners’ expectations about the future are shaky," said NFIB President and CEO Juanita D. Duggan.
"One thing small businesses make clear to us is their dislike for uncertainty, and while they are continuing to create jobs and increase compensation at a frenetic pace, the political climate is affecting how they view the future."
The NFIB's uncertainty index jumped seven points in January to 86, marking the fifth highest reading in the survey's 45-year history.