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U.S. stocks open higher after economic reports; Dow Jones up 0.35%

Published 06/18/2013, 09:41 AM
Updated 06/18/2013, 09:46 AM

Investing.com - U.S. stocks opened higher after on Tuesday, official data showed that U.S. inflation rose in line with expectations in May, adding to expectations for the Federal Reserve to maintain its easing program for the time being.

During early U.S. trade, the Dow Jones Industrial Average rose 0.35%, the S&P 500 index added 0.25%, while the Nasdaq Composite index gained 0.40%.

The Labor Department said U.S. consumer price inflation rose 1.4% from a year earlier in May, in line with forecasts and up from 1.1% in April.

Core inflation, which excludes food and energy costs, rose 0.2% in May, also in line with expectations.

Consumer prices rose 0.1% in May from a month earlier, slightly below expectations for a 0.2% increase.

Investors were looking ahead to outcome of the Federal Reserve’s monthly meeting on Wednesday amid uncertainty over the bank’s next move after Chairman Ben Bernanke said last month the bank could begin to taper asset purchases if the economy continued to improve.

Financial stocks were broadly higher, as shares in Bank of America rose 0.38% and JP Morgan added 0.39%, while Citigroup advanced 0.87%.


In the telecom sector, Verizon Communications gained 0.30% amid reports it has expressed interest in acquiring Canadian wireless carrier Wind Mobile.

On the downside, Sprint Nextel edged down 0.07% after saying it sued Dish Network seeking to block a buyout of Clearwire, saying Dish’s bid violates rights of investors in the wireless network provider.

Dish Network saw shares slip 0.18% following the news.

Elsewhere, U.S.-traded Sony shares surged 3.97% after U.S. hedge fund Third Point raised its stake in the Japanese electronics giant to 70 million shares.

Third Point CEO Daniel Loeb also urged Sony to spin-off its entertainment division, and offered to sit on Sony's Board of Directors.

Other stocks in focus included Adobe Systems, scheduled to release first-quarter earnings after the closing bell.

Across the Atlantic, European stock markets were mixed. The EURO STOXX 50 edged down 0.10%, France’s CAC 40 slipped 0.13%, Germany's DAX added 0.13%, while Britain's FTSE 100 jumped 0.90%.

During the Asian trading session, Hong Kong's Hang Seng Index dipped 0.02%, while Japan’s Nikkei 225 Index slipped 0.2%.

Also Tuesday, the Commerce Department said the number of building permits issued in the U.S. fell 3.1% in May to a seasonally adjusted 0.974 million, worse than expectations for a decline of 2.8% to 0.975 million units.

U.S. housing starts rose by 6.8% last month to hit a seasonally adjusted 0.914 million, below expectations for an increase of 11.4% to 0.950 million.


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