U.S. stocks opened higher on Tuesday, with the S&P 500 hitting an intraday record, after wholesale costs in the U.S. unexpectedly rose last month. Wall Street also weighed separate news that Japanese Prime Minister Shinzo Abe announced a delay in a second sales tax hike after the country unexpectedly fell into recession.
Data released Tuesday showed an unexpected rise in producer prices in October, propelled by a rise in prices in the services sector. The report could spark debate on whether the Federal Reserve will hike interest rates sooner rather than later, which most economists expect will happen in the middle of 2015. The producer price index increased 0.2 percent last month compared to a decline of 0.1 percent in September, the Labor Department said.
Separate data Tuesday showed confidence among home builders was increased last month. The report said home builder sentiment jumped 4 points in November to a seasonally adjusted level of 58, according to the National Association of Home Builders. A reading over 50 means most builders generally see conditions as positive.
Abe called for a snap election on Tuesday in a move to get the public to back his "Abenomics" package of reforms. He also announced a delay in the second sales tax hike by 18 months after the country unexpectedly fell into recession. The decision comes after gross domestic product figures on Monday showed the world's third-largest economy contacted by an annualized 1.6 percent in the third quarter, which shocked the financial markets.
Economists will be watching for a speech from Narayana Kocherlakota, president of the Federal Reserve Bank of Minneapolis, who is scheduled to speak on the central bank’s monetary policy outlook at 1:30 p.m. EST.
The blue-chip Dow Jones Industrial Average, which measures 30 large industrial stocks, climbed 45.58 points, or 0.26 percent, to 17,693.33; the S&P 500 Index rose 7.56 points, or 0.37 percent, to an intraday record high at 2,049.98. The Nasdaq Composite gained 29.10 points, or 0.62 percent, to 4,700.25.