Wall Street Opens Higher as US Consumer Spending Jumps

Wall Street opened higher on Thursday as data showed that the US economy was on the path to recovery after consumer spending recorded its largest increase in nearly six years.

Investors have been keeping a sharp eye on economic data for signs of a recovery in the US economy, which came to a crawl in the first quarter, as the Federal Reserve prepares to raise interest rates for the first time in almost a decade.

The Commerce Department said consumer spending increased 0.9 per cent last month, the biggest gain since August 2009, after a 0.1 per cent rise in April. Personal income increased 0.5 per cent last month after a similar gain in April.

Weekly jobless claims rose 3,000 to a seasonally adjusted 271,000 for the week ended June 20 but labor market conditions continued to tighten.

However, the US services sector grew in June at a slower pace than expected. Markit said its Purchasing Managers Index slipped to 54.8, short of expectations of 56.7.

Talks between Greece and its international creditors remained inconclusive, but markets remained hopeful that a last-minute deal will materialize. Greece's creditors will now put forward their own proposal for a cash-for-reforms deal.

Wall Street closed lower on Wednesday as it took cues from the latest situation in Greece.

"The market continues to be held hostage to the situation in Greece," said Art Hogan, chief market strategist at Wunderlich Securities in New York.

"Yesterday, it looked like the talks were less constructive and today we are seeing some movement in the right direction. The market would just like to see this situation in the rear-view mirror."

At 1348 GMT (7:18 p.m. in India), the Dow Jones industrial average was up 11.74 points, or 0.07 per cent, at 17,977.81, the S&P 500 was up 0.52 points, or 0.02 per cent, at 2,109.1 and the Nasdaq Composite was up 4.76 points, or 0.09 per cent, at 5,127.17.

Five of the 10 major S&P 500 sectors were higher, with the telecommunications index leading the gainers, with a 0.93 per cent rise.

IAC/Interactive shares jumped as much as 6.7 per cent to $82.75 - a record high - after the company said it planned to list its dating business, which includes Match.com and mobile app Tinder.

Molycorp slumped 38.4 per cent to 22 cents after the rare earths miner filed for bankruptcy protection to restructure $1.7 billion of debt.

Cree fell 9.9 per cent to $27.51, a day after the company cut its revenue forecast for the fourth quarter.

Winnebago Industries rose 7.1 per cent to $22.16 after the motorhomes maker reported a rise in quarterly revenue, helped by higher shipments of its motorhomes.

Declining issues outnumbered advancing ones on the NYSE by 1,500 to 1,217. On the Nasdaq, 1,258 issues rose and 996 fell.

The S&P 500 index showed seven new 52-week highs and eight new lows, while the Nasdaq recorded 43 new highs and seven new lows.