Stocks set for another pop

NEW YORK (CNNMoney.com) -- Stocks looked set to build on the past session's gains Tuesday, although trading is likely to be light on a shortened trading day before the July 4 holiday.

At 8:30 a.m. ET, futures were higher, with a comparison to fair value pointing to an advance for Wall Street at the open.

Wall Street kicked off the second half with solid gains Monday, lifted by a solid report on manufacturing, deal news and a decline in Treasury yields.

John Silvia, chief economist for Wachovia, said he believes the momentum from Monday should be enough to lift stocks higher in the shortened trading day Tuesday.

"I think there's some relief in the market," he said "Deals are getting done, the economy is looking good. And I think people just looking forward to the holiday. Usually the market picks up a little before a holiday."

U.S. stock markets will close at 1 p.m. ET and bond markets closing at 2 p.m. ET ahead of July 4. U.S. financial markets will be closed Wednesday.

The rally on Wall Street helped lift sentiment overseas, where markets in Asia finished higher and European shares rose at the open.

Treasury prices were little changed in early trading, leaving the yield on the 10-year note near the 4.99 percent reached after a rally Monday took yields below the 5 percent mark for the first time since early June.

The dollar was higher against the euro but little changed versus the yen in early trading. Oil prices were also little changed, leaving it just above the $71 a barrel level in electronic trading.

There is report of another deal for Wall Street to consider Tuesday, as snack food maker Kraft (Charts) announced that it had bid $7.2 billion for the global biscuit business of Groupe Danone (Charts). Danone will consider the offer on a exclusive basis.

In major corporate news, Wall Street firm Bear Stearns (Charts, Fortune 500) plans to increase oversight of its money management unit following the blowup of two of its hedge funds, according to a report in the Wall Street Journal.

German software company SAP (Charts) admitted one of its units downloaded documents from rival Oracle (Charts, Fortune 500) but said it did not have access to that intellectual property.

Major automakers are due to report June sales Tuesday, with sales tracker Edmunds.com forecasting that Ford Motor (Charts, Fortune 500) and General Motors (Charts, Fortune 500) will post declines in sales from year ago levels, while their rivals post improved sales. GM sales results are likely to be released after the early end of trading, though.

Economic readings due Tuesday include a government report on factory orders and the National Association of Realtors' measure of pending home sales, both due for release at 10 a.m. ET.