US stocks edge higher ahead of Italian vote
NEW YORK – Stock indexes edged higher in early trading Tuesday ahead of a key confidence vote in Italy that is the next step in Europe's unfolding debt crisis.
Yields on Italian government bonds have spiked this week, a sign that markets are questioning the country's ability to pay its debt. Unlike Greece, Portugal or Ireland — all of which received financial lifelines — Italy has too much debt to be rescued by its European neighbors.
Italian Premier Silvio Berlusconi's main coalition ally urged him to step aside Tuesday ahead of a vote that could force his resignation. Many investors believe a new government would enact more austerity measures that could help Italy cut its debt load and remain part of the euro.
Europe's debt crisis has dictated much of the trading in financial markets since the beginning of October. Investors fear that a disorderly default by Greece or another nation that shares the euro currency would lead to a widespread financial crisis similar to the one in 2008 after the fall of Lehman Brothers.
The Dow Jones industrial average was up 40 points, or 0.3 percent, to 12,111 fifteen minutes after the market opened. Bank of America Corp. led the 30 Dow stocks higher with a 1.4 percent gain.
The S&P 500 gained 6, or 0.5 percent, to 1,268. The Nasdaq composite added 22, or 0.8 percent, to 2,717.
European shares were broadly higher. Italy's benchmark index rose 2.5 percent. Benchmark indexes in Germany and France were up 2 percent.
Tuesday is a quiet day for economic news in the U.S. The Labor Department will report on job openings for September.
Priceline.com Inc. rose 4 percent after it said that its third-quarter earnings more than doubled from a year earlier. Most of the gains were attributed to a jump in hotel bookings.
Activision Blizzard Inc. gained 3 percent in premarket trading ahead of the company's earnings report. Investors expect the company's latest "Call of Duty" video game to sell about 10 percent more units than last year's version.
Auction house Sotheby's fell 5.4 percent after the company posted a wider-than-expected loss in the third quarter.