US stocks were sharply higher in early trade on Thursday morning as a flurry of economic data, mostly in line with expectations, gave traders something to focus on.
The US recorded a $40.3bn trade deficit last month, slightly narrower than the $41.0bn economists had projected.
Initial jobless claims were 456,000 last week, slightly worse than the 450,000 expected by Wall Street.
Less than an hour after the opening bell, the S&P 500 was up 2.4 per cent at 1,081.07, the Dow Jones Industrial Average gained 2.3 per cent to 10,131.34 and the Nasdaq Composite rose 2 per cent lower to 2,202.35.
US-listed shares in BP advanced 10.6 per cent to $32.28 a day after plunging to their lowest level since 1996. There were market rumours that Warren Buffet may be interested in buying a stake in the oil producer.
Shares in Transocean also rose, climbing 4.9 per cent to $44.67. The oil services contractor leased the rig from which crude oil is spilling into the Gulf of Mexico to BP.
Anadarko Petroleum, a Texas oil company that owns a 25 per cent stake in the rig, gained 10.5 per cent to $38.50.
Shares in Goldman Sachs were 0.5 per cent lower to $136.13 as the Securities and Exchanges Commission (SEC) launched a second probe into the bank and a hedge fund filed a suit against it.
The SEC is looking into a mortgage-backed deal arranged by Goldman Sachs, separate from the civil fraud charges filed against the bank in April. The focus is on Hudson Mezzanine Funding, a $2bn collateralised debt obligation.
An Australian hedge fund manager has sued Goldman Sachs for more than $1bn in damages, claiming the bank made “misleading statements” in connection with Timberwolf, a complex mortgage security underwritten by the bank in 2007.
AIG rallied 2.8 per cent to $35.18. The Congressional Oversight Panel said that the US government will maintain its stake in the insurer through 2012. It added that US taxpayers face “severe losses” from the government’s 2008 bailout of AIG. The panel’s report also said that there was a failure to “exhaust all options” as AIG verged on collapse at the height of the financial crisis.
American Capital, a private equity firm and asset manager, gained 5.9 per cent to $5.04. On Wednesday the company amended the terms of a debt exchange offer and extended the deadline, as it attempts to restructure $2.5bn of debt.
Walt Disney added 3.4 per cent to $34.07 as the world’s biggest media company by market value said its ABC television network sold about $2.4bn in advertising in advance of the coming television season.
Average prices for advertising during prime-time shows rose 8 to 9 per cent, said a person familiar with the matter, who asked not to be identified because the figures were not public.
