U.S. stocks open slightly higher after strong data; Dow Jones up 0.16%

U.S. stocks opened slightly higher on Tuesday, supported by upbeat U.S. housing sector data, although speculation the Federal Reserve could soon begin tapering its stimulus program persisted. 

During early U.S. trade, the Dow Jones Industrial Average added 0.16%, the S&P 500 index edged up 0.13%, while the Nasdaq Composite index eased up 0.08%. 

Standard & Poor’s with Case-Shiller said its house price index rose at an annualized rate of 13.3% in September from a year earlier, above forecasts for an increase of 13% and posting its largest increase since February 2006. 

U.S. home prices in August rose by 12.8%. 

The report came after data showed that U.S. building permits rose at the fastest pace in five years in October. 

The U.S. Commerce Department said that the number of building permits issued in October rose 6.2% to a seasonally adjusted 1.034 million from September’s total of 0.970 million. Analysts expected building permits to decline to 0.940 million units in October. 

In the financial sector, Citigroup edged up 0.19% although it failed to persuade a U.S. judge that Abu Dhabi Investment Authority was barred under an agreement with the bank from seeking arbitration over USD2 billion in claims the emirate’s entity already pursued and lost. 

The tech sector was also in focus, with Qualcomm up 1.06% even as China’s National Development and Reform Commission began an investigation on the company related to an anti-monopoly law. 

Among earnings, luxury retailer Tiffany beat estimates, posting profit of 73 cents a share that sent the stock soaring 7.24%. 

Men’s Wearhouse rallied 6.39% after offering to buy rival Jos. A. Bank Clothiers for about USD1.54 billion. Shares in Jos. A. Bank Clothiers surged 11.76% following the news. 

Elsewhere, Wal-Mart Stores saw shares add 0.17% a day after the company named Doug McMillon as its new chief executive officer, replacing Mike Duke. 

Across the Atlantic, European stock markets were mixed to lower. The EURO STOXX 50 dipped 0.02%, France’s CAC 40 fell 0.19%, Germany's DAX added 0.10%, while Britain's FTSE 100 declined 0.43%. 

During the Asian trading session, Hong Kong's Hang Seng Index dipped 0.01%, while Japan’s Nikkei 225 Index slid 0.67%. 

Later in the day, the U.S. was to produce private sector data on consumer confidence.

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Forex - GBP/USD gives up gains after Carney comments

The pound erased gains against the dollar on Tuesday after Bank of England Governor Mark Carney said the 7% unemployment target is a threshold and not a trigger for rising interest rates.

GBP/USD dipped 0.01% to 1.6154 during European afternoon trade, down from session highs of 1.6194.

Cable was likely to find support at 1.6100 and resistance at 1.6239, Monday’s high.

Carney welcomed the fall in the U.K. unemployment rate to 7.6% in the third quarter, but reiterated that the bank’s 7% target for unemployment was a threshold at which the bank would consider raising interest rates.

"The exact timing of when that 7% threshold will be achieved is subject to uncertainty. We do our best to give our estimates of that uncertainty... One month's unemployment figures does not have a material change on those likelihoods," he said.

The comments came during testimony on the BoE’s quarterly inflation report before parliament’s Treasury committee.

Carney defended the bank’s forward guidance on rates, saying it gives market participants a view of the conditions that the bank needs to see before considering rate hikes.

On the economy, Carney said that "all the elements" were in place for a pick-up in activity.

Sterling was lower against the euro, with EUR/GBP rising 0.19% to 0.8382.

The euro shrugged off dovish remarks by European Central Bank board member Benoit Coeure, who said Tuesday that negative deposit rates are still a possibility.

Investors were turning their attention to preliminary euro zone inflation data, due out on Friday, amid expectations that the annual rate of inflation would rise to 0.8% in November, from October’s four year low of 0.7%.

The slowdown in euro zone inflation last month prompted the ECB to cut interest rates to a record low 0.25% at its November meeting.

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