US stocks up on profits

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IOL wall street THE PHOTO HOLIC File image

New York - Wall Street stocks opened higher Tuesday following solid corporate earnings reports and a large tobacco merger as investors awaited congressional testimony from the head of the US Federal Reserve.

Five minutes into trade, the Dow Jones Industrial Average advanced 40.52 points (0.24 percent) to 17,095.94.

The broad-based S&P 500 gained 3.08 (0.16 percent) to 1,980.18, while the tech-rich Nasdaq Composite Index added 6.71 (0.17

percent) at 4,447.13.

Earnings for Dow components Goldman Sachs, Johnson & Johnson and JPMorgan Chase all exceeded expectations.

Meanwhile, US tobacco giant Reynolds American said it will buy Lorillard for $27.4 billion and sell cigarette brands including Salem and Winston to British firm Imperial Tobacco for $7.1 billion.

Reynolds said the deal would bolster its position in the US market and in the growing e-cigarette category. Reynolds shares fell 2.9 percent, while Lorillard sank 7.1 percent.

Meanwhile, the Commerce Department reported that US retail sales rose only 0.2 percent in June, below expectations for a 0.7 percent gain.

However, the agency upgraded its estimate for May retail sales growth from 0.3 percent to 0.5 percent.

Investors are keeping close watch on Capitol Hill, where Fed Chair Janet Yellen kicks off two days of testimony.

Markets are especially keen for any clues on whether the Fed will push up its timeframe for raising benchmark interest rates, currently expected in mid-2015. - Sapa-AFP

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