US open: Shares higher in thin trade as goods deficit widens
By Frank Prenesti
Date: Wednesday 29 Dec 2021
(Sharecast News) - US stocks were higher at the opening on Wednesday as investors digested data showing America's trade deficit widened to a record high, while Omicron Covid variant cases continued to surge.
The Dow Jones Industrial Average was up 0.29%, while the S&P 500 rose 0.25% and the Nasdaq 0.08%.
Data from the US Commerce Department showed the goods trade deficit widened last month by 17.5% to $97.8bn, up from $83.2bn in October and breaking the previous record in September of $97bn.
Imports were boosted by businesses seeking to stock up for the holiday shopping season. Consumer demand for goods has been strong this year - as the US economy has kept growing, and stimulus cheques and record low interest rates have supported household spending.
Elsewhere on the macro front, pending home sales, a leading indicator of the housing market's health, fell unexpectedly in November.
The National Association of Realtors' (NAR) Pending Home Sales Index, which tracks the number of homes that are under contract to be sold, dropped 2.2% in November from October. Analysts had forecast an 0.8% increase in sales. Pending sales slid 2.7% year on year.
"There was less pending home sales action this time around, which I would ascribe to low housing supply, but also to buyers being hesitant about home prices," NAR Chief Economist Lawrence Yun said.
In equity news, electric-car maker Tesla chief executive Elon Musk exercised all of his options expiring next year, signalling an end to his stock sales. Shares in the company are up 54% for the year.
US carriers Delta Air Lines and Alaska Air Group cancelled hundreds of flights again on Tuesday as the daily count of domestic infections surged. Boeing shares fell on the news.
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