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U.S. stocks open sharply higher, financials lead; Dow Jones up 1%

Published 05/28/2013, 09:46 AM
Updated 05/28/2013, 09:47 AM
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Investing.com - U.S. stocks opened sharply higher on Tuesday, boosted by comments by European Central Bank officials, although expectations for a near-term end to the Federal Reserve's bond-buying program persisted.

During early U.S. trade, the Dow Jones Industrial Average jumped 1%, the S&P 500 index rallied 1.14%, while the Nasdaq Composite index advanced 1.18%.

Stocks found support after ECB Executive Board member Peter Praet said the bank could still cut interest rates further to stimulate the economy if needed.

His remarks followed ECB Executive Board member Joerg Asmussen's comments on Monday that the central bank would stick to its expansive monetary policy for as long as necessary.

But investors still remained cautious amid expectations that the Federal Reserve is moving closer to scaling back its USD85 billion-a-month asset purchase program.

Financial stocks were broadly higer, as U.S. lenders tracked their European counterparts. Shares in JP Morgan advanced 1.03% and Goldman Sachs rallied 1.56%, while Bank of America and Citigroup surged 1.66% and 2.14% respectively.

Among Internet-related stocks, Google added to gains, jumping 1.32%, after the Wall Street Journal reported that the company plans to partner with CNN and BuzzFeed Inc. to introduce a new online video channel.

Elsewhere, News Corp. edged up 0.05% after Rupert Murdoch's company said it will write down the value of the publishing business it plans to spin off next month.

The value of the unit will reportedly be reduced by USD1.2 billion to USD1.4 billion in the second quarter.

In earnings news, Tiffany posted better-than-expected quarterly results, sending shares in the upscale jeweler up 4.97%.

Across the Atlantic, European stock markets were sharply higher. The EURO STOXX 50 jumped 1.68%, France’s CAC 40 surged 1.54%, Germany's DAX rallied 1.36%, while Britain's FTSE 100 gained 1.78%.

During the Asian trading session, Hong Kong's Hang Seng Index jumped 1.05%, while Japan’s Nikkei 225 Index rallied 1.2%.

Also Tuesday, the Case-Shiller U.S. home price index rose 10.9% in March from a year earlier, above expectations for 10.2% and the biggest increase since April 2006.

Later in the day, the U.S. was to release a report on consumer confidence.


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