Stocks cling to gains

NEW YORK (CNNMoney.com) -- Stocks cut gains Tuesday morning, clinging to positive territory, as investors weighed upbeat earnings from Goldman Sachs and Best Buy, rising oil prices and the latest woes for the housing sector.

The Dow Jones industrial average (INDU) added 0.3 percent almost 90 minutes into the session. The broader S&P 500 (INX) index added 0.4 percent. The tech-fueled Nasdaq (COMPX) composite gained 0.4 percent.

Stocks had slumped Monday and the previous week on worries about the economic outlook amid rising inflationary pressures and slower growth prospects. After such a selloff, stocks bounced back at the open Tuesday. But the advance dwindled as the morning wore on.

In earnings news, Goldman Sachs (GS, Fortune 500) reported higher quarterly sales and earnings that topped estimates, managing to deliver despite the current credit market crisis. Nonetheless, shares fell, as investors took a 'sell the news' reaction.

Best Buy (BBY, Fortune 500) reported higher quarterly sales and earnings that topped forecasts, thanks to extra shopping days in November and more store openings. However, the electronics retailer cautioned that December and fourth-quarter sales will be constrained. Shares slipped over 1 percent in the early going.

Also helping early sentiment: news that the European Central Bank (ECB) has made available unlimited funds at a set rate for the next two weeks, in a move to help with liquidity demands through the end of the year. The move follows an announcement last week that the ECB, the U.S. Federal Reserve and other banks have teamed up to make billions available for banks seeking loans.

But that was countered by further signs of deterioration in the housing market. Housing construction and building permits dropped in November, according to a government report released Tuesday. The decline was smaller than what economists had forecast, but nonetheless showed a continued pullback for the sector. (Full story)

Market breadth was positive. On the New York Stock Exchange, winners beat losers three to two on volume of 350 million shares. On the Nasdaq, advancers topped decliners five to four on volume of 530 million shares.

Treasury prices rose, lowering the yield on the 10-year note to 4.11 percent from 4.14 percent late Monday. Treasury prices and yields move in opposite directions.

In currency trading, the dollar gained versus the euro and slipped against the yen.

U.S. light crude oil for January delivery rose $1.57 to $92.20 a barrel on the New York Mercantile Exchange.

COMEX gold for February delivery rose $10.70 to $810 an ounce.