Stocks Advance Ahead of Data

Rosy comments from the Dallas Fed president add to hopes about inflation and retail sales data on tap.
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Updated from 4:09 p.m. EST

Stocks were higher Monday as traders were heartened by a

Federal Reserve

official's upbeat assessment of the economy ahead of a busy week for data and earnings reports.

The

Dow Jones Industrial Average

gained 23.45 points, to 0.2%, at 12,131.88, and the

S&P 500

advanced 3.52 points, or 0.3 %, to 1384.42. The

Nasdaq Composite

was higher by 16.66 points, or 0.7%, at 2406.38.

The Dow benefited from gains of 1.2% or more in

Intel

(INTC) - Get Report

,

AIG

(AIG) - Get Report

and

General Motors

(GM) - Get Report

.

Meanwhile, the Nasdaq was aided by a 7.9% rise in

Wynn Resorts

(WYNN) - Get Report

after the company declared a special cash distribution of $6 a share.

Paul Nolte, director of investments with Hinsdale Associates, said the market is close to being overbought, and that could signal a meaningful pullback.

"We remain cautious still and expect at least some correction of the three-month run," he said. "How long and deep the correction remains a big question for now."

Helping stocks were comments from Dallas Fed President Richard Fisher, who said the U.S. economy was "growing forcefully." At the same time, Treasury prices came under pressure. The benchmark 10-year Treasury note was recently down 3/32 in price, yielding 4.60%. Meanwhile, the two-year note was down 2/32, yielding 4.76%.

"We'd like to see the yield curve spread out a bit," said Paul Mendelsohn, chief investment strategist with Windham Financial. "If the inverted yield curve picks up momentum to the downside, it could indicate an extreme slowdown. It may take longer to get liquidity out of the system with such an inversion."

The U.S. market is coming off a week in which the Dow rose 1%, the S&P 500 gained 1.2% and the Nasdaq was higher by 2.5%. On Friday, the Dow added 5.13 points to 12,108.43, and the S&P 500 ended up 2.57 points at 1380.90. The Nasdaq climbed 13.71 points to 2389.72.

As the new week got started, traders were looking to position themselves ahead of two key inflation reports, the producer price index and the consumer price index, along with retail sales numbers from the government and industrial production figures.

Marc Pado, U.S. market strategist with Cantor Fitzgerald, said this week's data will be heavily affected by crude and retail sales. "This is why investors' sentiment is so critical," he said. "We need the consumer to make the fourth quarter a success. Ahead of all of this news, stocks should see a tame open and a cautious session of trading."

However, data won't be the only headlines, as quarterly financials are on tap from

Wal-Mart

(WMT) - Get Report

,

Target

(TGT) - Get Report

,

D.R. Horton

(DHI) - Get Report

,

Dell

(DELL) - Get Report

,

Hewlett-Packard

(HPQ) - Get Report

and

Applied Materials

(AMAT) - Get Report

.

Tyson Foods

(TSN) - Get Report

swung to a fourth-quarter loss of $56 million, or 17 cents a share, compared with earnings of $117 million, or 33 cents a share, last year. Excluding items, the company had a loss of 7 cents a share, below analysts' expectations of a loss of 4 cents a share, according to Thomson First Call.

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The world's largest distributor of chicken products said it expects to return to profitability in the current quarter, and it offered a fiscal 2007 guidance that was in line with estimates. Shares of Tyson added 4% to $14.93.

Away from earnings,

Clear Channel

(CCU) - Get Report

could get takeover bids valuing the company at $17 billion, according to reports, and

IBM

(IBM) - Get Report

is joining

Citigroup

(C) - Get Report

in a $3 billion proposal for an interest in a big Chinese bank.

Clear Channel recently was down 1.7% to $34.38. IBM was higher by 0.3% to $92.07, and Citigroup gained 0.1% to $50.69.

In analysts' actions, UBS cut its rating for

SanDisk

(SNDK)

to neutral from buy while lowering its stock price target to $55 from $75. Meanwhile, Goldman Sachs downgraded

Coca-Cola Enterprises

(CCE)

to sell from neutral.

SanDisk lost 1.1% to $45.24. Coca-Cola Enterprises gave back 0.6%,to $19.98.

Crude futures extended the last session's decline after the International Energy Agency cut its 2006 global oil demand forecast. Oil prices were lower by $1.01 to $58.58 a barrel.