Stocks gain in early trading
Wall Street advances as investors look to latest economic reports.
NEW YORK (CNNMoney.com) -- Stocks rose Tuesday morning as investors geared up for a spate of reports on the services sector, factory orders and pending home sales.
The Dow Jones industrial average (INDU) climbed 0.6%. The Standard & Poor's 500 (SPX) index and the Nasdaq composite (COMP) added 0.8%.
Asian markets ended mixed Tuesday, with Tokyo's Nikkei up 0.4%. European stocks were higher in the afternoon.
A rise in oil prices and more dismal auto sales in December contributed to Monday's decline on Wall Street. But declines were countered by enthusiasm about President-elect Barack Obama's proposal for $300 billion in tax cuts.
"Out of all the stimulus packages, the one thing that does work is giving some incentive to businesses and consumers," said Peter Cardillo, chief market economist for Avalon Partners, referring to Obama's plan.
Anthony Conroy, head trader at BNY Brokerage, agreed that "there's speculation that the stimulus package is going to revive the economy faster than expected."
The rise in futures is also being driven by New Year's optimism among investors, who seem to be hoping that the economy is at or near its bottom, said Conroy.
Company job cuts: Cigna (CI, Fortune 500), a health benefits company, said Monday that is was cutting 1,100 jobs, or 4% of its total workforce, to save up to $40 million.
The Philadelphia-based company said it was making the cuts "in response to the economic downturn that will strengthen the company's competitive position." Cigna shares fell 1%.
Logitech (LOGI), a maker of computer products, said Monday that it was cutting 15% of its salaried work force, without providing a total number of the cuts.
The company, based in Fremont, Calif., and Switzerland, also withdrew its corporate guidance, without providing new earnings targets.
Logitech Chief Executive Gerald Quindlen said, in a press release, that "the retail environment deteriorated significantly." Shares fell 5.5%.
In other company news, Toyota Motor Corp. (TM) said it would idle production at its Japanese factories for 11 days in February and March because of a 37% slump in U.S. sales.
This follows a three-day break in manufacturing that Toyota announced for January at 12 factories in Japan. Shares were little changed.
Economic reports: Three reports due after the markets open were likely to draw market attention.
The Institute for Supply Management will issue its December report on the services sector. The index is seen declining to 37 from 37.3 in November, according to a consensus of economists surveyed by Briefing.com; such a level would signify contraction in the sector and recession in the economy.
The government will report on November factory orders, with a decline of 2.6% forecast in the Briefing.com consensus. That would be an improvement over the 5.1% plunge in October.
The morning also brings the pending home sales report for November from the National Association of Realtors. In the afternoon, the Federal Reserve releases the minutes from its last policy meeting in December.
Oil and money: Oil prices flirted with $50 a barrel, rising $1.10 to $49.91 on the New York Mercantile Exchange. The dollar climbed against major international currencies, including the euro, the yen and the British pound.
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