U.S. Stocks Open Higher Ahead Of Key Manufacturing Data

NEW YORK (MarketWatch) -- U.S. stocks opened higher on Tuesday, in a rebound from the prior day's losses, as investors set up for key data on manufacturing, housing, and auto sales.

The Dow Jones Industrial Average gained 29 points to 13,092, as 23 of its 30 components advanced.

Bucking the trend, shares of Procter & Gamble Co. dropped 2.7% after the personal care products maker narrowed its outlook range.

Also on the Dow, General Motors Corp. dropped 0.6% ahead of U.S. auto sales figures later in the session.

And Microsoft Corp. rose 0.4%. The software giant may offer somewhere "in the $1 billion range" for internet advertising firm 24/7 Real Media , according to The New York Post.

The S&P 500 advanced 1.3 points to 1,483, while the Nasdaq Composite gained 3.9 points to 2,529.

The market's focus will turn to the Institute for Supply Management's April survey of the manufacturing sector to be released at 10 a.m. Eastern. Economists polled by MarketWatch expect the ISM index rose to 51.0% in April from 50.9% in March.

Also due at 10 a.m, is the pending home sales index for March.

While earnings have for the most part easily beat Wall Street expectations, which had been lowered sharply, investors are keen to decipher the economic trends for the rest of the year.

Economic reports, including the ISM data and the April employment report on Friday, will receive particular attention ahead of next week's Federal Reserve meeting on interest rates.

Most economists expect the Fed, which has been on hold since last summer, to leave the key overnight unchanged at 5.25%. But there could be switches in stance in the policy communiquC).

"The focus is clearly shifting to the economy as the Fed gets set to meet next week," said Marc Pado, chief U.S. market strategist at Cantor Fitzgerald. "While no one is looking for the Fed to move in either direction, the mix of inflation data and economic weakness is causing some investors to lock in April's profits."

Fed Chairman Ben Bernanke is scheduled to speak on trade at trade at a conference in Montana at 11 a.m. Eastern.

The auto sales reports should dribble out throughout the day. The MarketWatch forecast, based on the median of predictions collected from economists, is for a total of 12.1 million cars sold by General Motors, Ford Motor Co. and DaimlerChrysler AG's Chrysler unit combined.

On Monday, U.S. stocks closed lower, after investors consolidated some of the hefty gains posted in April, while weighing at a revealing not only tame inflation but also a weakening The Dow finished with a 58 point loss, the S&P 500 fell 11.7 points and the Nasdaq Composite dropped 32 points.

There was little overnight market news, as most European markets, save London, were closed for May Day celebrations and there was scant data in Japan.

Stocks in Motion

Retailer Circuit City Stores Inc. dropped 11%. The company withdrew its fiscal first-half 2008 outlook and said its fourth-quarter loss from continuing operations will widen due to the timing of revenue recognition of Internet-oriented sales.

Citigroup later downgraded the stock to hold, warning that more bad news could be on the way.

Billionaire investor Carl Icahn continued his bid for a seat on Motorola Inc.'s board by sending an open letter to shareholders that is being published as a full-page advertisement, according to a media report Tuesday.

Pfizer Inc. won a Canadian appeals-court ruling. A lower court would have allowed Teva's Canadian unit Novopharm to launch a generic version of Pfizer's Celebrex pain reliever.

Other markets

Treasurys were slightly higher, extending gains seen on Monday when economic reports showed easing inflation pressures and slowing economic activity in the U.S.

The benchmark 10-year Treasury note last was up 2/32 at 100-2/32 with a yielof 4.618%.

The dollar was little changed against other currencies, steadying after a sell-off in the previous session. "The dollar may be vulnerable to renewed selling in the event that yesterday's theme of slowing growth and easing inflationary pressures resurfaces in today's reports," said Ashraf Laidi, chief foreign-exchange analyst at CMC Markets in New York.

The euro was last up 0.04% at $1.3655, while the dollar was up 0.06% at 119.48 yen.

Crude-oil futures were slightly lower, one day ahead of weekly data on supplies that's expected to show a modest build in crude stocks, but further declines in gasoline supplies. In addition, Iran agreed Monday to join international talks on security in Iraq.

Gold futures fell Tuesday in thin trading, as lower crude-oil prices failed to lend support to the precious metal.

Gold for June delivery declined $6.10 to $677.40 an ounce on the New York Mercantile Exchange.

Crude for June delivery was crude is down 11 cents at $65.60 a barrel in early electronic trade.

By Leslie Wines