By Kate Gibson, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks opened with modest gains Monday on thinking the standoff in Washington over automatic spending cuts and tax hikes could be resolved.
"If the 'fiscal cliff' is averted in the U.S., prospects for the U.S. economy are reasonably good in 2013," said Ed Yardeni, chief investment strategist at Yardeni Research Inc.
The uncertainty of whether politicians would reach an agreement and avoid more than $600 billion in automatic tax hikes and spending cuts otherwise cue to start in January was expected to keep equities on a volatile ride until an accord to reached.
U.S. stocks fell the most in five months last week as investors turned to newly re-elected President Barack Obama's budget standoff with the Republican-majority House of Representatives.
On Monday, the Dow Jones Industrial Average (DJI) climbed 22.45 points, or 0.2%, to 12,837.84.
The S&P 500 index (SPX) advanced 4.79 points, or 0.3%, to 1,384.64.
The Nasdaq Composite (RIXF) added 13.83 points, or 0.5%, to 2,918.77.
For every stock falling two gained on the New York Stock Exchange, where 49 million shares traded by 9:45 a.m. Eastern.
Jefferies Group Inc. (JEF) rallied after Leucadia National Corp. (LUK) said it would buy what remained of the investment bank that it does not already own.
Titanium Metals Corp. (TIE) jumped after Precision Castparts Corp. (PCP) said it would buy the melted-products manufacturer.
During the weekend, a report had China's export growth rising to a five-month high above 11%, topping estimates and adding to recent data that signal a possible end to seven straight quarters of slowing.
"The good news is there is some good news coming out of China. Since 2010, the Three Horsemen of the Apocalypse have been a double-dip recession in the U.S., a financial meltdown in Europe, and a hard landing in China," noted Yardeni.
News that Greece passed its 2013 budget ahead of a meeting of finance ministers due later in the day cheered some investors.
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