U.S. Stocks Open Higher As UK/Iran Tensions Ease
NEW YORK (MarketWatch) - U.S. stocks opened firmly higher Tuesday, extending gains from the previous session, as investors cheered a drop in crude oil prices amid easing tensions between the UK and Iran, and as investors await data on housing and monthly auto sales.
The Dow Jones Industrial Average was up 63 points at 12,446, as 29 of its 30 components rose. Leading the gains on the Dow were shares of Altria Group Inc. , Home Depot Inc. and United Technologies Corp. .
Exxon Mobil Corp. was the only blue-chip stock falling, as crude oil prices fell 88 cents to $65.06 a barrel.
Oil fell back after tentative signs that the U.K. and Iran could be close to a deal to free 15 sailors held by Iran after a U.K. boat entered disputed waters. Ali Lariani, a member of Iran's Supreme National Security Council and its chief nuclear negotiator, said the situation could be resolved diplomatically, according to reports. Iran is the world's fourth-largest producer of crude oil.
The S&P 500 rose 6 points to 1,430, while the Nasdaq Composite gained 13 points to 2,435.
On Tuesday, investors are beginning to focus on squaring positions ahead of what will be for many people an extended Easter holiday.
"With little economic news, other than auto sales, the market will focus on corporate news," said Peter Cardillo, chief market economist at Avalon Partners. U.S. stocks also benefited from "global markets doing nicely overnight", he said.
At 10 a.m. Eastern the market will view pending home sales data for February. Recent housing sector reports have shown continued deterioration in residential real estate.
Auto sales reports for March from Ford Motor Co. , General Motors Corp and DaimlerChrysler Ag' U.S. unit Chrylser Corp will dribble out throughout the day and is expected to show that the domestic auto industry is still having trouble selling to consumers.
Investors also are curious about the latest U.S. sales results from Japan's Toyota Motor Corp. , Honda Motor Co. and Nissan Motors .
On Monday stocks finished a bit higher, starting the second quarter out on a positive note, after a raft of new deals, including a $29 billion leveraged buyout of First Data Corp by Kohlberg Kravis Roberts. .
Stocks to watch
The European Commission has charged that Apple Inc. and Warner Music Group and other companies are breaking antitrust rules by limiting access to music downloads by country.
Nonetheless, shares of Apple rose 0.4%.
Shares of Google Inc. rose 2%. The Internet search giant will sell television ads through a partnership with EchoStar Satellite and Astound Cable, a small internet provider in Northern California. The trial is Google's initial attempt to adapt its do-it-yourself Internet advertising features, known as AdSense, to making and selling TV ads.
Subprime worries are back in focus. Fremont General said its auditor, Grant Thornton, resigned. Grant Thornton said that during the audit there were instances where Fremont didn't provide certain requested information on dates previously agreed upon with management, according to a letter it filed with the Securities and Exchange Commission. Fremont's subprime mortgage lending unit, which accounted for roughly half its business, stopped offering loans earlier this year.
Fremont stock dropped 4.6%.
Among Dow components, Procter & Gamble Co. gained after saying the products manufactured by its petcare unit are completely safe. Last week, the Food and Drug Administration recalled products after a new contaminant known as melamine had been found, though P&G said its Lams- and Eukanuba- branded dry foods were not part of the recall. The company has suspended production of some other products and is working with retailers to recall others.
GlaxoSmithKline plc. could benefit from its announcement that its once-daily, extended-release ropinirole mediction improves symptoms in patients with Parkinson's disease. The stock was 0.6% higher.
Hershey Foods Corp. will pay around $60 million for a 51% equity stake in India's Godrej Beverages & Food Ltd., a move that will help the U.S. chocolate maker gain access to a fast-growing confectionary market.
Pearson plc was downgraded to hold from buy at Stifel Nicolaus, due to valuation concerns.
Other markets
Crude-oil futures dropped $1 to $64.94 a barrel and gold futures slipped $3.30 to $662.40 an ounce. There were tentative signs that the U.K. and Iran could be close to a deal to free 15 sailors held by Iran after a U.K. boat entered disputed waters. .
U.K. Prime Minister Tony Blair said the next 48 hours will be "fairly critical" toward resolving the dispute, according to an Associated Press report quoting a Scottish radio station.
The yen tumbled to a one-month low against the dollar and five-week low versus the euro early Tuesday, as gains in stock markets overseas prompted investors to reestablish the so-called carry trades. The euro was up 0.07% at $1.3362, while the dollar was up 0.8% at 118.72 yen.
Treasurys were pressured by the expected gains in the stock market. The benchmark 10-year note was down 3/32 at 99-24/32 with a yield of 4.657%.
By Nick Godt