Stocks muster gains

NEW YORK (CNNMoney.com) -- Stocks rose Monday morning, finding a little momentum after a choppy morning influenced by weak global markets and a big drop in December new home sales at the start of a busy week on Wall Street.

The Dow Jones industrial average (INDU) added 0.2 percent around 100 minutes into the session. The broader Standard & Poor's 500 (SPX) index added 0.5 percent and the Nasdaq composite (COMP) gained 0.2 percent.

Stocks slumped Friday, as investors backtracked after a two-session rally that had brought some relief after a miserable start to the year. After a slow start Monday, stocks turned higher again.

The advance was pretty broad, with 23 out of 30 Dow issues rising, led by Merck (MRK, Fortune 500), American Express (AXP, Fortune 500) and JP Morgan (JPM, Fortune 500).

New home sales fell to a 604,000 annualized rate in December, the government reported, missing forecasts and reflecting the continued collapse of the housing market. The 2007 drop in new home sales was the worst on record. (Full story).

Stocks tumbled through most of January on worries that the housing and credit market crises would send the economy into a recession, if it isn't there already.

To address the risks, last week the U.S. government announced a $150 million fiscal stimulus plan that would bring tax relief to millions of Americans. Meanwhile, the Federal Reserve announced an emergency interest-rate cut, ahead of its regularly scheduled meeting this week.

The Fed cut the fed funds rate, a key short-term interest rate, by three-quarters of a percentage point, to 3.50 percent. Investors are hoping that the Fed will cut rates by another quarter-percentage point at the conclusion of its two-day meeting on Wednesday.

Earnings news. McDonald's (MCD, Fortune 500) reported quarterly sales and earnings that rose from a year ago and topped estimates. The company said global sales at stores open a year or more, or same-store sales, grew, while U.S. same-store sales were flat. Shares slumped 6 percent.

Verizon Communications (VZ, Fortune 500) reported higher quarterly earnings that matched estimates on higher quarterly revenue that missed estimates. Shares of the Dow component slid 3 percent.

Corning (GLW, Fortune 500) reported higher quarterly sales and earnings that topped expectations, thanks to stronger demand for glass used in flat-screen televisions and computers. Shares gained 1 percent.

In other news, Blackstone Group's deal to buy Alliance Data Systems for $6.4 billion could be in trouble due to what the company said were unprecedented regulatory demands. Shares of ADS (ADS) plunged 33 percent in active New York Stock Exchange trading. Blackstone shares were barely changed.

Other markets. In global trade, most Asian markets ended lower and European markets weakened in late trade.

Treasury prices slipped, raising the yield on the 10-year note to 3.59 percent from 3.56 percent late Friday. Bond prices and yields move in opposite directions.

In currency trading, the dollar fell versus the yen and rose versus the euro.

U.S. light crude oil for March delivery fell $1.31 to $89.40 a barrel on the New York Mercantile Exchange.

COMEX gold rallied $9.30 to $920 an ounce.