MARKET SNAPSHOT: U.S. Stocks Open Higher With Auto Sales On Deck

By Kristina Peterson

A modest U.S. stock rally Tuesday helped push blue-chip stocks into positive territory for the year, as materials and energy stocks climbed on higher metals and commodities prices.

U.S. stocks pared gains after Kansas City Federal Reserve President Thomas Hoenig reiterated in a televised interview on the cable channel CNBC that the Federal Reserve should not guarantee zero-percent interest rates for an extended period.

"We're going to have these days throughout the year, when investors get hit with the idea of eventual tightening," said Owen Fitzpatrick, head of U.S. equity group at Deutsche Bank. But the reaction is largely a knee-jerk one that's bound to dissipate, Fitzpatrick added.

The Dow Jones Industrial Average (DJI) was recently up 46 points, or 0.4%, at 10,449, crossing above its break-even point for the year.

Rising metals futures helped boost materials and industrials stocks including Caterpillar Inc. (CAT), up 0.5%, and Boeing (BA), up 1.7%.

Weighing on the Dow, Wal-Mart Stores Inc. (WMT) shed 0.7%. The Dow's worst performer was AT&T (T), down 0.7%.

The Nasdaq Composite (RIXF) gained 0.5% and the Standard & Poor's 500-share index (SPX) rose 0.6%. Its materials and financial sectors led the advance, while consumer discretionary and telecommunications stocks lagged.

Investors said major market moves will likely be put on hold until February's jobs report is released on Friday and more details of Greece's budget-control measures are revealed.

"We're kind of in a holding pattern right now," said Barry James, president and CEO of James Investment Research. "We don't really see a strong recovery. It's likely to be bouncing along. The good news has been out."

The Greek government is expected to outline on Wednesday a new austerity package of around EUR 4 billion ($5.42 billion) in an effort to cut its huge budget deficit by four percentage points this year, government officials said. Greece's debt management agency is also preparing a 10-year bond hoping to raise between EUR3 billion and EUR5 billion, another official said.

Auto makers will likely grab attention on Tuesday, as February sales figures are released. Toyota's string of recalls last month, combined with bad weather, likely dragged down February sales, economists predicted.

Adding to the industry's woes, General Motors on Tuesday recalled 1.3 million compact cars over power-steering trouble.

But some companies are expected to benefit from their competitors' troubles. Ford Motor Co. (F) opened at its highest price since February 2005, though shares were recently down 1.2%.

Among stocks in focus, Denny's (DENN) rose 5.9% after an investor group proposed three nominees for the board of directors, saying the family restaurant chain needs a shake up to stop years of sales and market share declines.

Fertilizer maker Terra Industries (TRA) shares jumped nearly 12% after CF Industries Holdings (CF) resumed its pursuit of the company with a $4.72 billion offer that seeks to break up the agreed bid from Norway's Yara International .

Qualcomm (QCOM) shaers rose 5.5% after increasing its stock buyback authority and increasing its dividend by 12%.

But Staples Inc. (SPLS) shares slid 7.8% after its fiscal fourth-quarter earnings fell 18% on restructuring and legal charges, missing expectations, even as the office retailer saw same-store sales grow for the first time in more than a year.

In other markets, the dollar weakened against the yen, but strengthened against the euro. Crude-oil futures rose, approaching $80 per barrel, while gold futures also climbed. Treasurys declined with the 10-year note off 5/32 to yield 3.627%.