- Merck, Sprint rise after earnings
- FOMC in focus as two-day meeting begins
- Consumer confidence falls, home prices rise
Dow Jones: 0.38%
S&P 500: 0.30%
US stock markets opened higher on Tuesday on the back of better-than-expected corporate earnings, as investors took a positive stance ahead of a policy meeting at the Federal Reserve.
Companies such as Merck & Co and Sprint were rising after the opening bell, while Allergan rose on bid rumours as M&A speculation continues across the global pharmaceutical sector.
The Dow Jones Industrial Average, Nasdaq and S&P 500
were up 0.3-0.4% in early trading, but had all pared gains slightly within the first hour.
The Federal Open Market Committee kicks off its two-day policy meeting today and is widely expected to announce that it will continue tapering its asset purchase programme by $10bn each meeting. This will bring the monthly stock of bond buying down from $55bn to $45bn.
Analysts at Rabobank said it to be a case of "steady as she goes" at the central bank "given the Fed's tapering inertia and the apparent confirmation by recent data that the extreme winter weather was indeed responsible for much of the weakness in earlier data".
In economic news today, the Conference Board's US consumer confidence index declined to 82.3 in April, missing the 83.2 consensus forecast. Nevertheless, the prior month's figure was revised higher to 83.9, the index's highest reading since 2008.
Meanwhile, the S&P/Case-Shiller composite home price index, which measures house values in 20 metropolitan areas, rose at an annual rate of 12.9% in February, down from 13.2% growth the previous month but broadly in line with analysts' estimates.
Allergan rises on M&A speculation
Shares in Allergan gained on reports that the Botox maker contacted companies such as Sanofi and Johnson & Johnson to gauge others' interest before responding to last week's $46bn offer from Valeant Pharmceuticals. Bloomberg sources said that Allergan was making inquiries to see if a sale to a larger rival is possible.
Pharma peer Merck & Co rose strongly after saying that earnings rose 7% in the first quarter to 57 cents a share despite falling sales, beating the 52 cents estimate.
Telecoms group Sprint also impressed after narrowing losses in the first quarter to just four cents per share, from 21 cents the year before. Revenues edged higher from $8.8bn to $8.88bn, in line with estimates.
Fuel refiner Valero trounced analysts' forecasts for the first three months of the year, reporting earnings of $1.54 per share in comparison to estimates for $1.39.
West Texas Intermediate futures were 1.53% higher at $102.14 a barrel on the NYMEX.
The yield on a 10-year US Treasury was up two basis points at 2.72%.