Stocks turn higher

NEW YORK (CNNMoney.com) -- Stocks gained Monday morning, rising after a sluggish start, as investors built on last week's Federal Reserve-inspired rally and geared up for a string of key economic reports due later in the week.

The Dow Jones industrial average (Charts) added 0.3 percent almost 2 hours into the session, while the broader S&P 500 (Charts) index saw smaller gains. The tech-fueled Nasdaq composite (Charts) added 0.7 percent.

GM (Charts, Fortune 500) stock was active and higher after the United Auto Workers' union began picketing the company after the 11 a.m. ET strike deadline passed. Reportedly, contract talks continue.

All three major gauges added at least 2.7 percent last week as investors hailed the Federal Reserve's decision to cut a key short-term interest rate for the first time in four years.

Investors will be looking to the economic news later this week to continue the advance, including reports on consumer confidence, housing, durable goods orders and personal income and spending.

Federal Reserve Chairman Ben Bernanke is expected to speak later Monday at an education summit in Washington.

Dow stock Microsoft (Charts, Fortune 500) jumped 3 percent ahead of the launch of its highly-anticipated Halo 3 video game at midnight.

Fellow Dow components Caterpillar (Charts, Fortune 500) and 3M (Charts, Fortune 500) rose as well.

EMC (Charts, Fortune 500) rose 4 percent in active trading after Citigroup upgraded the computer data storage maker to "buy" from "hold." Citigroup pointed to recent strong earnings and the outlook for VMware, the maker of virtualization software that EMC spun off last month but still holds a big stake in.

Separately, Citigroup initiated coverage of VMware (Charts) with a "buy" and a $100 price target.

Other big tech gainers included Apple (Charts, Fortune 500), which rose after Citigroup boosted its price target and earnings forecast for fiscal-year 2008 and 2009.

On the downside, Sonus Pharmaceuticals (Charts) plunged 83 percent in active Nasdaq trading after the company said a late-stage trial of its breast cancer treatment failed and it was giving up development of the drug.

Treasury prices fell, raising the yield on the 10-year note to 4.64 percent from 4.62 percent late Friday. Bond prices and yields move in opposite directions.

In currency trading, the dollar fell to a new record low against the euro and also slipped against the yen.

U.S. light crude oil for November delivery lost 92 cents to $80.70 a barrel on the New York Mercantile Exchange.

Last week, the October contract settled at a record high of $83.32. However, the record price remains below inflation-adjusted highs hit in the early 1980s, which would be equal to at least $95 a barrel today.

COMEX gold for December delivery rose $1.80 to $740.70 an ounce.