11:30AM Strong consumer confidence and deal news supported averages.

U.S. stock averages traded higher, as merger activity boosted corporate optimism and consumer confidence index in May improved more than expected. The largest deal was offered by a consortium of banks led by Royal Bank of Scotland. The consortium said it will bid $95.5 billion for the Dutch bank ABN Amro (ABN: chart), topping an offer from Barclays (BCS: chart). Archstone-Smith (ASN: chart) surged 10% amid reports that the company is close to a $20 billion acquisition deal by Tishman Speyer and Lehman Brothers. In completed deals, URS Corp. (URS: chart) added 3.6% after it agreed to buy engineering and design company Washington Group (WNG: chart) in a deal worth $2.6 billion. Washington Group stock climbed 17%.

Networking, airline, and utility sectors moved notably higher. Tech shares posted gains, with Google Inc. (GOOG: chart) rising 1%, despite news of a preliminary antitrust probe into its planned $3 billion deal to buy online advertiser DoubleClick. Avaya (AV: chart) rose 13%, leading the networking sector higher and CDW 8.6% after the companies were cited as private equity buyout targets.

In late morning trading, the Dow rose 33.16, or 0.25%, to 13,540.44. The Standard & Poor''s 500 index advanced 3.10, or 0.20%, to 1,518.83, and the Nasdaq composite index added 11.53, or 0.45%, to 2,568.72. Bonds fell after the consumer confidence data, with the yield on the benchmark 10-year Treasury note rising to 4.88% from 4.86% late Friday.

Consumer confidence improved in May.
Tuesday morning, the Conference Board released its report on consumer confidence in the month of May, showing that consumer attitudes improved more than expected compared to an upwardly revised reading for the previous month. The Conference Board said that its consumer confidence index rose to 108.0 in May from an upwardly revised 106.3 in April. Economists had expected the index to increase to 105.0 compared to the 104.0 originally reported for the previous month.

The report showed that the present situation index rose to 136.1 in May from 133.5 in April, while the expectations index edged up to 89.2 from 88.2. The Conference Board said that claiming conditions are ''good'' rose to 29.4 percent from 27.5 percent. At the same time, those saying conditions are ''bad'' was almost unchanged at 14.5 percent. The outlook for the next six months remains cautious, according to the Conference Board, as those anticipating business conditions to improve increased to 15.1 percent from 13.8 percent, while those expecting business conditions to worsen edged up to 10.1 percent from 9.7 percent.


9:45AM U.S. stocks opened modestly higher amid merger deals.

Wall Street opened slightly higher Tuesday, helped by multibillion-dollar acquisition deals. Better-than-expected economic data also generated positive sentiment. The Conference Board said that its consumer confidence bounced back in May to 108.0 from 106.3 in April. Economists had expected the index to rise to 105.8.

A consortium of banks led by Royal Bank of Scotland said it will bid $95.5 billion for ABN Amro (ABN: chart), topping an offer from Barclays. Tishman Speyer Properties and Lehman Brothers Holdings (LEH: chart) are reportedly interested in buying Archstone-Smith Trust (ASN: chart) for more than $12 billion, including $6 billion in debt.

Washington Group (WNG: chart) surged 16% after the engineering and construction company agreed to be acquired by URS Corp. (URS: chart) for $2.6 billion in cash and stock. Shares of Avaya (AV: chart) climbed 13% amid reports that the communications equipment maker is in talks regarding a sale of part or all of the company.

Airline stocks moved notably higher in morning trading, with AirTran (AAI: chart) rising 3.4% and Continental (CAL: chart) adding 3.8%. The wireless sector also posted gains, helped by 4% rise in the shares of Vodafone (VOD: chart) on narrower full-year loss.

Strength in the gold, tobacco, and semiconductor sectors also provided a boost. Among semiconductor stocks, Marvell Technology (MRVL: chart) advanced 3%. In the first hour of trading, the Dow rose 27.96, or 0.21%, to 13,535.24. The Standard & Poor''''s 500 index advanced 2.50, or 0.16%, to 1,518.23, and the Nasdaq composite index added 6.45, or 0.25%, to 2,563.64. Bonds fell slightly, with the yield on the benchmark 10-year Treasury note rising to 4.87% from 4.86% late Friday.


9:30AM FTSE 100 is higher on Tuesday morning with Vodafone in focus.

The UK benchmark FTSE 100 is higher in mid-day trading on Tuesday. The FTSE 100 rose 26.8 points, 0.4%, at 6,597.3.

Advancers

Vodafone Group led the advancers after it announced an upbeat outlook statement and reported an 11.4% rise in adjusted basic earnings per share. The mobile phone company added that while it hoped operating conditions to continue to be challenging in Europe, group revenue was expected to be in the range of 33.3 billion pounds to 34.1 billion pounds. Vodafone jumped 4.8%.

Satellite TV provider BSkyB advanced 3% after UBS upped its price target, reiterating its buy rating. IMI, the engineering group, led mid-cap advancers after Citigroup hiked its rating from hold to buy. The group traded up 6.3%.

Airliner British Airways, 4.8% higher, was also reporting strong gains on reports that US investment bank Goldman Sachs has suspended its rating on the shares. Last week, Goldmans raised its stake in BA to over 5%.