NEW YORK (CNNMoney.com) - Stocks started Tuesday in positive territory thanks to falling oil prices, tame winter weather in the Northeast and a smattering of upbeat economic and corporate news.

The Dow Jones industrial average gained 0.5 percent out of the gate, while the Nasdaq composite index and the broader S&P 500 both gained 0.3 percent.

Oil prices retreated after the storm due to hit New York and the rest of the East Coast was short of earlier forecasts.

The January light crude futures contract for NYMEX lost 26 cents to $59.65 a barrel in electronic trading.

The January crude contract hit a one month high Monday, sparking a stock sell-off and reigniting inflation fears. Analysts say that oil prices will continue to guide equities Tuesday.

The government reported Tuesday that productivity rose 4.7 percent in the most recent quarter, up from its original estimate of a 4.1 percent rise in the period and better than the consensus forecast of a 4.5 percent gain, according to economists surveyed by Briefing.com.

At 10 a.m. ET the government was due to report on October factory orders, which are forecast to be up 2.2 percent, after a 1.7 percent fall in September in the wake of Hurricane Katrina.

The markets also got a lift from major retailers, which are being closely watched as the holiday shopping season ramps up. Target (Research), the nation's No. 3 general retailer, reaffirmed its guidance of 4 to 5 percent growth in sales at stores open at least a year. Shares rose extended premarket gains.

Meanwhile Sears Holdings (Research), which includes the Sears and Kmart brands, reported a drop in earnings for the quarter ended Oct. 31, although it was not as steep as forecast. Shares rose on the results.

In other corporate news, Verizon Communications (Research) shares edged higher after the company said late Monday it would reduce retirement benefits for 50,000 managers in a bid to save $3 billion over the next 10 years.

And the Wall Street Journal reported Monday that Time Warner (Research) is in talks with Microsoft (Research) about cooperation on Web search, advertising sales and possibly other areas. CNN/Money is a unit of Time Warner.

Major markets in Asia closed mixed Monday. Major European markets were higher in early trading.

Treasury prices rose, lowering the yield on the 10-year note to 4.53 percent from 4.56 percent late Monday. The dollar gained ground against the euro and the yen.