U.S. stocks rise as markets eye budget talks, Italy; Dow Jones up 0.29%

Investing.com - U.S. stocks opened higher on Monday, as U.S. budget talks were to resume later in the day, while markets eyed the outcome of general elections in Italy.

During early U.S. trade, the Dow Jones Industrial Average added 0.29%, the S&P 500 index climbed 0.47%, while the Nasdaq Composite index advanced 0.74%.

Later in the day, U.S. Congress was to reconvene to decide on the USD85 billion in automatic spending cuts due to take effect on March 1.

Meanwhile, investors remained wary ahead of the results of Italy’s election, amid concerns that a hung parliament could hamper efforts to implement further economic reforms and lead to instability in the euro zone’s third largest economy.

Barnes & Noble soared 8.44% after the Wall Street Journal reported that Chairman Leonard Riggio is considering a bid for the company's bookstore business.

Financial stocks added to gains, as shares in JP Morgan added 0.35% and Citigroup climbed 0.56%, while Goldman Sachs and Bank of America rallied 0.78% and 0.87% respectively.

On the downside, Hewlett-Packard slipped 0.10% after the Wall Street Journal reported that the company's Chairman Ray Lane and fellow board members plan to meet with about 20 of the computer maker's big investors Monday, with hopes of heading off a campaign to unseat Lane and two other directors.

Affymax added to losses, plunging 84.72%, after it and Takeda Pharmaceutical, Asia’s biggest drugmaker, voluntarily recalled an anemia treatment for dialysis patients after reports of "serious hypersensitivity reactions" that could be life-threatening.

Elsewhere, H.J. Heinz, which has agreed to be bought by Warren Buffett’s Berkshire Hathaway, fell 0.25% after saying it will sell its packaged-food business in China to Zhengzhou Sanquan Foods.

In the same sector, Yum! Brands pledged to ramp up safety and tighten requirements for suppliers in China after a probe into chicken providers dragged down local sales, sending shares up 0.63%.

Also in corporate news, Office Depot said late on Friday that following talks with the largest holder of its common stock, Starboard Value LP, it is extending the deadline for nominating candidates for its board at its annual meeting.

The news sent shares in the company down 2.63% at the open of the U.S. trading session.

Other stocks in focus included Caesar's Entertainment and Autodesk, due to report quarterly results after the closing bell.

Across the Atlantic, European stock markets were sharply higher. The EURO STOXX 50 surged 2.39%, France’s CAC 40 jumped 1.79%, Germany's DAX rallied 2.32%, while Britain's FTSE 100 advanced 0.50%.

During the Asian trading session, Hong Kong's Hang Seng Index added 0.17%, while Japan’s Nikkei 225 Index rallied 2.43%.

Also Monday, data showed that China’s HSBC Flash Purchasing Managers Index, the earliest indicator of the country's industrial activity, fell to a four-month low of 50.4 in January from a final reading of 52.3 in December.