U.S. stocks rise ahead of Fed meeting; Dow Jones up 0.56%

Investing.com - U.S. stocks opened higher on Tuesday, as investors awaited the outcome of the Federal Reserve's two-day policy meeting amid mounting expectations it may announce further easing measures to bolster growth.

During early U.S. trade, the Dow Jones Industrial Average climbed 0.56%, the S&P 500 index advanced 0.58%, while the Nasdaq Composite index jumped 1.13%.

Sentiment improved earlier after data showed that the German ZEW index of economic sentiment improved unexpectedly in December, re-entering positive territory for the first time since May, while the ZEW index for the euro zone improved more-than-expected this month.

In the U.S., official data showed that the trade deficit expanded less-than-expected in October, rising to USD42.2 billion from a deficit of USD40.3 billion the previous month.

Analysts had expected the trade deficit to expand to USD42.6 billion in October.

In the tech sector, Intel jumped 1.59% after presenting new manufacturing technology, as the company plans to to launch a new generation of chips for smartphones and tablets.

Meanwhile, Texas Instruments rallied 1.78% after slightly raising its profit target, amid cost reductions due to macro-economic uncertainties.

Financial stocks added to gains, as shares in Bank of America rose 0.38% and JP Morgan climbed 0.40%, while Goldman Sachs jumped 0.80%. Citigroup underperformed on the other hand, slipping 0.03%.

Separately, the Wall Street Journal reported earlier that Morgan Stanley might seek approval from the Federal Reserve to repurchase shares for the first time in four years, sending the financial group's shares up 2.59%.

On the downside, industrial machinery maker SPX Corp dove 8.91% amid reports it is in talks to buy rival Gardner Denver, with hopes of finalizing a deal by the end of the year.

In earnings news, Dollar General tumbled 1.98% after it said it topped earnings expectations, but reported weaker-than-expected outlook, weighed by growing competition.

Across the Atlantic, European stock markets were higher. The EURO STOXX 50 climbed 0.87%, France’s CAC 40 advanced 0.80%, Germany's DAX rose 0.64%, while Britain's FTSE 100 added 0.11%.

During the Asian trading session, Hong Kong's Hang Seng Index climbed 0.40%, while Japan’s Nikkei 225 Index slipped 0.09%.

Investors were also awaiting fresh developments in negotiations to avoid the U.S. fiscal cliff amid concerns that the automatic tax hikes and spending cuts due to take effect in early 2013 could derail the U.S. recovery.