US open: Stocks turn green following solid earnings, Brexit deal
Stocks traded higher at the open on Thursday as markets breathed a sigh of relief after a draft Brexit deal was struck between UK and EU officials and on the back of solid earnings from some more blue-chip companies.
As of 1530 BST, the Dow Jones Industrial Average was up 0.32% at 27,088.27, while the S&P 500 was 0.60% stronger at 3,007.76 and the Nasdaq Composite started out the session 0.44% firmer at 8,160.20.
The Dow opened 86.29 points higher on Thursday after closing out the previous session lower as investors monitored the Brexit negotiations, digested some lacklustre retail figures and sifted through more earnings reports from some of the country's biggest firms.
However, sentiment got a boost after British Prime Minister Boris Johnson revealed that he had "a great new Brexit deal" via Twitter.
Johnson implored MPs to support the deal when it's put before Parliament on Saturday, while European Commission President Jean-Claude Juncker said he felt the deal was "fair and balanced".
But the Northern Irish Democratic Unionist Party vowed to not support the government' Brexit plans "as it stands", markets on both sides of the Atlantic rallied on the news.
Oanda's Craig Elam said: "Anyone hoping that the process will be straightforward now is kidding themselves.
"With Labour whipping for a second referendum on the deal and the Lib Dems unlikely to support anything, there is still a good chance we're heading for an extension and election, in order to get this over the line. Nothing in Brexit is ever simple."
In terms of trade news, China emphasised that the US would be required to remove tariffs before the two nations could agree to any trade deal.
On the data front, the number of Americans filing for unemployment benefits rose a little less than expected last week, according to figures released by the Department for Labor on Thursday.
Initial jobless claims increased by 4,000 from the previous week to 214,000, coming in a touch below expectations for a level of 215,000.
Elsewhere, US housing starts fell more sharply than anticipated during the previous month, albeit due to weakness in the volatile multi-family segment with analysts at Pantheon Macroeconomics telling clients to look past the weakness in the headline numbers.
According to the Department of Commerce, in seasonally adjusted terms, the annualised rate of housing starts shrank at a month-on-month pace of 9.4% in September to reach 1.256m - considerably worse than the 1.320m pace that economists had penciled in.
Over in the factory sector, activity in the US mid-Atlantic region continued to hum along at a steady pace in October, the results of a closely-followed survey showed.
The Federal Reserve Bank of Philadelphia's manufacturing sector index slipped from a reading of 12.0 in September to 5.6 for October. That was a tad worse than the drop to 7.1 anticipated by economists, but the details of the survey findings were strong.
Lastly, industrial production in the States shrank a tad more than expected last month on the back of weakness in motor vehicle production and mining.
According to the Department of Commerce, total output dropped at a 0.4% month-on-month pace (consensus: -0.1%), although upwards revisions to readings for the prior month acted as an offset.
By market groups, production of business equipment was especially weak, dropping by 0.5% on the month following a rise of 1.1% in August.
In corporate news, Honeywell shares were up 2.69% after it raised forecasts for full-year earnings after beating analyst expectations, while Morgan Stanley shares picked up 3.52% in early trade after posting better than expected earnings for its latest quarter, driven by its activities in the fixed income space and from its investment management arm.
Shares in US tobacco giant Philip Morris were down 1.10% at the bell after it cut its full-year profit guidance on Thursday following an investigation by a Russian tax authority that concluded its local affiliate had underpaid taxes.
Netflix shares rallied 4.37% after publishing its quarterly results late on Wednesday and reporting a profit per share (BPA) of $ 1.47 - a figure that beat the consensus forecast of $ 1.05.
'Big Blue', as traders often refer to IBM, on the other hand was falling 6% following its latest quarterly update.