US stocks opened higher today after American car-maker General Motors reached a tentative contract agreement with the United Auto Workers and as another lackluster economic report stirred hopes that the Federal Reserve will cut interest rates again.
General Motors Corp. jumped $2.13, or 6.2 per cent, to $36.55 after the UAW announced an agreement to halt a two-day strike while the union considers a contract agreement. Production at GM facilities is expected to resume on Wednesday. The deal could help GM pass some of its health care costs to the union.
Beyond the GM news, the US Commerce Department said demand for durable goods fell in August, indicating that the recent credit crisis might have hurt US companies. Orders for durable goods dropped 4.9 percent last month to a seasonally adjusted $219.53 billion.
The report follows data released Tuesday that showed existing home sales stalled in August, and consumer confidence in September remains a worry. Investors are hoping the data will persuade the Fed to drop rates again.
Policymakers decided last week to lower rates by a half-point, the first cut in four years. It triggered a rally on Wall Street as stocks bounced from their lows of the year.
In the first minutes of trading, the Dow Jones industrial average rose 68.85, or 0.50 per cent, to 13,847.50.
Broader stock indicators also rose. The Standard & Poor's 500 index advanced 7.09, or 0.47 per cent, to 1,524.30, and the Nasdaq composite index rose 14.25, or 0.53 per cent, to 2,697.70.