U.S. stock markets open higher after CAT earnings; Dow up 0.2%

Investing.com - U.S. stock markets opened higher on Monday, as upbeat earnings from Dow heavyweight Caterpillar boosted sentiment and as markets stabilized following a broad based selloff in emerging market currencies.

During early U.S. trade, the Dow Jones Industrial Average rose 0.2%, the S&P 500 advanced 0.2%, while the Nasdaq Composite index inched up 0.1%.

U.S. stocks suffered their worst weekly loss since 2011 last week, with the Dow plunging 318 points on Friday.

The selloff in financial markets was triggered after data last week pointed to a steeper than expected slowdown in Chinese manufacturing, fuelling fears that weakness could spread to other emerging market economies.

But those fears eased after Turkey’s central bank said earlier that it will hold an emergency meeting to discuss measures to ensure price stability.

The Turkish lira recovered from record lows against the dollar following the announcement, abating fears over ongoing turmoil in emerging markets.

Meanwhile, Dow heavyweight Caterpillar saw shares surge 6.1% after reporting better-than-expected fourth quarter earnings and revenue figures earlier.

The global construction equipment manufacturer said earnings per share came in at USD1.54, beating expectations for earnings of USD1.27 per share. The company’s fourth quarter revenue totaled USD14.4 billion, above forecasts for revenue of USD13.65 billion.

Caterpillar increased its full-year adjusted earnings outlook to USD5.85 per share, compared to expectations for earnings of USD5.77 per share. The firm also announced the authorization for a new USD10 billion stock buyback plan.

Shares in Apple rose 1.5% as investors positioned themselves in the stock ahead of the company’s quarterly earnings report due after the closing bell.

On the downside, Sony saw shares fall 2% after ratings agency Moody's cut its rating on the debt of Sony to 'Junk' on profit concerns.

Market players were looking ahead to the outcome of the Federal Reserve’s monthly meeting on Wednesday, amid expectations for a reduction in its bond buying program to USD65 billion from the current USD75 billion.

The policy meeting will mark the last for outgoing Fed Chairman Ben Bernanke, as current Vice Chair Janet Yellen prepares to take over.

In addition, the initial estimate of U.S. fourth quarter gross domestic product is reported on Thursday.

Across the Atlantic, European stock markets were mixed. The EURO STOXX 50 inched up 0.15%, France’s CAC 40 was flat, Germany's DAX slipped 0.1%, while Britain's FTSE 100 lost 1.4%.

The German research institute Ifo said its business climate index rose to 110.6 in January, above forecasts for a reading of 110.0 and up from 109.5 in December, indicating that businesses in the euro zone’s largest economy had a strong start to the year.

During the Asian trading session, Hong Kong's Hang Seng Index tumbled 2.12%, while Japan’s Nikkei 225 Index dropped 2.51%.