NEW YORK - Stocks rose in early trading Tuesday ahead of a shortened holiday schedule for U.S. markets, with investors betting that a report on pending home sales will show some recovery for the beleaguered sector.
The market also drew confidence from new merger and acquisition activity: Kraft Foods Inc. said it offered $7.2 billion in cash to acquire the biscuit division of French food company Groupe Danone SA. The U.S. food company said it made an offer Monday to buy such European brands as LU, Petit Dejeuner, Tuc, and Mikado. Danone said its board is considering the bid on an exclusive basis.
Trading was fairly subdued, as stock markets are set to close early at 1 p.m. EDT ahead of the July 4th holiday.
The National Association of Realtors' report on pending home sales, to be released at 10 a.m. EDT, should suggest whether the real estate market's slowdown is dragging on into the summer. The Commerce Department will also release its May report on factory orders for both big-ticket and less-expensive items at 10 a.m. EDT.
In the first hour of trading, the Dow Jones industrial average rose 28.29, or 0.21 percent, to 13,563.72.
Broader stock indicators were also higher. The Standard & Poor's 500 index was up 4.55, or 0.30 percent, at 1,523.98, and the Nasdaq composite index was up 6.31, or 0.24 percent, at 2,638.61.
Bonds fell slightly, with the yield on the benchmark 10-year Treasury note edging higher to 5.00 percent from 4.99 percent late Monday. The dollar was mixed against other major currencies, while gold prices slipped.
Meanwhile, Ford Motor Co. said late Monday it may take a third-quarter pretax charge of $1.47 billion linked to an offer for some of its debt. The company will also be in focus, along with General Motors Corp., as automakers report June sales. Ford dropped 24 cents, or 2.5 percent, to $9.42.
Caterpillar, one of the 30 Dow components, weighed on the blue-chip index after being downgraded by a UBS analyst. The heavy machinery maker, which had been the biggest gainer in the Dow Monday, fell $2.42, or 3 percent, to $77.98 in early Tuesday trading.
Though the average U.S. retail price of a gallon of gasoline has fallen below $3, investors are keeping an eye on crude oil prices. A barrel of light sweet crude fell 27 cents to $70.82 on the New York Mercantile Exchange, after closing at a 10-month high Monday.
Overseas, Japan's Nikkei stock average rose 0.02 percent. Britain's FTSE 100 rose 0.72 percent, Germany's DAX index added 1.06 percent, and France's CAC-40 rose 0.78.
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