NEW YORK (TheStreet) -- U.S. stocks were booking modest gains on Tuesday after domestic construction spending expanded faster than expected and speculation mounted over further stimulus measures from the European Central Bank and the People's Bank of China.
Construction spending in October increased 1.1% from September to $970.9 billion after two straight months of contraction. Economists expected a 0.6% rise. The rise in construction spending was the largest gain since May.
The S&P 500 added 0.35%, the Dow Jones Industrial Average climbed 0.27%, and the Nasdaq gained 0.48%.
European markets were mixed, with France's CAC 40 up and Germany's DAX down, after eurozone factory prices dipped at a faster-than-expected rate of 0.4% in October. The ECB is set to review monetary policy on Thursday and is expected to cut growth and inflation outlooks.
Hopes are high that China also will introduce new monetary easing policies after Chinese manufacturing slipped in November and was hovering near the cusp of contraction.
"Europe and China are the two biggest worries, given the size of their economies, and have been for some time so any incremental good news coming out of those countries is very positive for the markets," Croft Funds' portfolio manager Kent Croft told TheStreet recently.
After rebounding on Monday, crude oil was moving lower, down 2.3% to $67.41 a barrel. Prices have been squeezed after OPEC declined to constrain production despite global oversupply.
"The suppliers are going to start restraining production at some point," predicted David Bechtel, principal of Barrow Funds, in a call. "They're going to want to see oil get back up into the mid-$80s, low-$90s minimum. It's probably a project that occurs over the next 12 to 18 months."