U.S. stocks higher on euro zone hopes; Dow Jones up 0.64%

Investing.com - U.S. stocks opened higher on Tuesday, as investor confidence strengthened amid hopes for progress at a meeting of European Union ministers later in the day, while markets were also eyeing a German court decision on the EU bailout fund.

During early U.S. trade, the Dow Jones Industrial Average climbed 0.64%, the S&P 500 index advanced 0.58% while the Nasdaq Composite index gained 0.71%.

Markets eyed talks between EU finance ministers, after euro zone officials agreed on Monday to make EUR30 billion in aid available to assist Spain’s struggling banking sector by the end of the month, while also supporting plans to extend Spain’s deficit target deadline by one year to 2014.

They made no apparent progress, however, on activating the bloc's rescue funds to intervene in bond markets and bring down Spain and Italy’s spiraling borrowing costs.

Spain’s 10-year government bonds eased to 6.74% earlier, moving below the critical 7% threshold which is widely seen as unsustainable in the long term.

Markets were also jittery as Germany's top court was due to decide whether the EU's permanent bailout fund is compatible with national law, potentially leading to deeper fiscal integration within the region.

Aluminum producer Alcoa saw shares climb 0.57% after the company announced late Monday quarterly revenue and profit that beat estimates, even though prices for its aluminum are at nearly two-year lows.

Also in earnings, Applied Materials tumbled 2.27% after the chipmaker said it expects third-quarter results to be in the lower half of its previous outlook. The company also cut its fiscal 2012 sales outlook on weaker-than-expected demand.

In the computer tech sector, Google advanced 0.50% amid reports it was close to paying USD22.5 million to settle charges that it bypassed the privacy settings of customers using Apple's Safari browser. Apple shares gained 0.66% following the news.

Intel shares fell 0.38% on the other hand, after saying it will spend more than USD4 billion on up to 15% of ASML and bankroll the Dutch company's research into costly next-generation chip-making technology.

Elsewhere in company news, United Technologies surged 1.74% after announcing on Monday that its Sikorsky Aircraft unit had signed a five-year, USD8.5 billion contract to build 653 H-60 Black Hawk and Seahawk helicopters for the U.S. Army and Navy.

Financial stocks also contributed to gains, as U.S. lenders tracked their European counterparts sharply higher. Shares in Citigroup surged 1.61% and bank of America rallied 1.32%, while JP Morgan and Goldman Sachs advanced 0.71% and 0.78% respectively. 

Barclays Chairman Marcus Agius said earlier that the bank’s former CEO, Bob Diamond, will forgo deferred bonuses valued at as much as GBP20 million after politicians protested his role in the Libor- fixing scandal.

Across the Atlantic, European stock markets were sharply higher. The EURO STOXX 50 jumped 1.44%, France’s CAC 40 advanced 1.35%, Germany's DAX surged 1.49%, while Britain's FTSE 100 climbed 1%.

During the Asian trading session, Hong Kong's Hang Seng Index eased down 0.1%, while Japan’s Nikkei 225 Index dipped 0.4%.

Also Tuesday, official data showed that Chinese exports and imports in June slowed from the previous month, as weakening global demand weighed.