Stocks opened higher Wednesday after General Motors Corp. reached a tentative contract agreement with the United Auto Workers and as another lackluster economic report stirred hopes that the Federal Reserve will cut interest rates again.
GM shares rose after the UAW announced an agreement to halt a two-day strike while the union considers a contract offer. Production at GM facilities is expected to resume on Wednesday. The deal could help GM pass some of its health care costs to the union.
Beyond the GM news, the Commerce Department said demand for durable goods fell in August, indicating that the recent credit crisis might have hurt U.S. companies. Orders for durable goods dropped 4.9 percent last month to a seasonally adjusted $219.53 billion.
The report follows data released Tuesday that showed existing home sales stalled in August, and consumer confidence in September remains a worry. Investors are hoping the data will persuade the Fed to drop rates again.
Policymakers decided last week to lower rates by a half-point, the first cut in four years. It triggered a rally on Wall Street as stocks bounced from their lows of the year.
In early trading, the Dow Jones industrial average rose 59.02, or 0.43 percent, to 13,837.67.
Broader stock indicators also rose. The Standard & Poor's 500 index advanced 5.38, or 0.35 percent, to 1,522.59, and the Nasdaq composite index increased 11.20, or 0.42 percent, to 2,694.65.
Bonds fell, with the yield on the benchmark 10-year Treasury note jumping to 4.66 percent from 4.64 percent late Tuesday. The dollar was mixed against other major currencies, and gold prices rose.
Oil prices strengthened for the first time this week, with a barrel of light, sweet crude rising $1.04 to $80.57 on the New York Mercantile Exchange. Traders are betting that U.S. inventory data will show further falls in crude oil stockpiles. Oil has pulled back from last week when it logged a string of record closes and traded near $84.
In corporate news, GM jumped $1.55, or 4.5 percent, to $35.98 on news that workers would return to their jobs. GM was by far the biggest advancer among the 30 stocks that make up the Dow industrials.
Nasdaq Stock Market Inc. and Borse Dubai upped their offer to acquire Nordic exchange operator OMX to 265 kronor a share from 230 kronor. The two acquiring stock exchanges also said they secured 47.6 percent stake in OMX, which the latest offer values at $4.9 billion. Nasdaq Stock Market shares rose 74 cents, or 2 percent, to $37.
Red Hat Inc. shares advanced 79 cents, or 4.3 percent, to $19.68 after the maker of open-source software reported second-quarter profit rose 59 percent and revenue came in ahead of Wall Street projections.
Advancing issues outnumbered decliners by about 3 to 1 on the New York Stock Exchange, where volume came to 102.1 million shares.
The Russell 2000 index of smaller companies rose 4.67, or 0.58 percent, to 807.67.
Overseas, Britain's FTSE 100 rose 1.22 percent, Germany's DAX index rose 0.55 percent, and France's CAC-40 rose 1.09 percent. In Asia, Japan's Nikkei index closed up 0.21 percent and Hong Kong's Hang Seng Index fell 0.46 percent.
