Wall Street opens higher after McDonald's results, job data

Strong results from McDonald's and eBay saw the Dow Jones industrial average rise on Oct 22, 2015.
Strong results from McDonald's and eBay saw the Dow Jones industrial average rise on Oct 22, 2015.PHOTO: BLOOMBERG

NEW YORK (REUTERS) - Wall Street opened higher on Thursday after strong results from McDonald's and eBay lifted sentiments and jobless claims data supported evidence of a healthy labor market.

Shares of Dow component McDonald's soared 7.5 per cent to $110.18 after its quarterly earnings and revenue beat estimates as demand recovered in China. The stock gave the biggest boost to the S&P 500 and the Dow.

Dow Chemicals rose 5.6 per cent to $50.11 while Southwest Airlines rose 5.9 per cent to $43.47 after the companies reported strong results.

At 9:52 a.m. ET (9:52 pm Singapore time), the Dow Jones industrial average was up 153.93 points, or 0.9 per cent, at 17,322.54, the S&P 500 was up 19.63 points, or 0.97 per cent, at 2,038.57 and the Nasdaq composite index was up 55.21 points, or 1.14 per cent, at 4,895.33.

Nine of the 10 major S&P sectors were up, with the materials sector's 1.8 per cent rise leading the advancers. Dow Chemicals provided the biggest boost to the materials sector.

Technology majors Microsoft, Alphabet, AT&T and Amazon are due to report after the close. "I think expectations are pretty low for everybody and that's probably why you're seeing some beats here," said Tom Cassidy, chief investment officer at Girard Partners.

Cassidy said the biggest factor for investors scrutinizing the reports would be revenue, which has been hurt by a slowing global economy and a stronger dollar.

The dollar index inched up after the European Central Bank left interest rates unchanged. The index has risen roughly 5 per cent this year.

European Central Bank President Mario Draghi said the bank could extend its stimulus program beyond 2016 as part of its efforts to boost euro-zone growth and bring inflation closer to its target of close to 2 per cent.

EBay rose 10 per cent to $26.62 and Texas Instruments was up 9.5 per cent at $56.85 after they reported better-than-expected third-quarter results late on Wednesday.

Caterpillar fell 0.9 per cent to $69.25 and 3M fell 1 per cent to $151.33 after the companies missed revenue estimates.

Data showed U.S. unemployment benefits claims increased 3,000 to 259,000 last week, below the 265,000 expected.

Existing home sales are expected to have grown 1.4 per cent to an annual rate of 5.38 million units in September.

The Federal Reserve, which kept interest rates unchanged at near-zero levels at a September meeting, has said it will wait for signs of global economic resilience before pulling the trigger.