By Anora Mahmudova and Carla Mozee, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks opened higher Tuesday with modest gains pushing the Dow Jones Industrial Average above 17,000, thanks to prices gains in Merck & Co and Pfizer Inc following better-than-expected quarterly results.
The S&P 500 (SPX) opened up 3 points, or 0.2%, at 1,981. The Dow Jones Industrial Average (DJI) added 40 points, or 0.2%, to 17,000. The Nasdaq Composite (RIXF) began the session with a gain of 7 points, or 0.2%, to 4,4457.
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A snapshot of consumer confidence from the Conference Board is due at 10 a.m. Eastern. The reading is expected to fall to 85.0 in July, after a jump in June to the index's highest level in six and a half years. Confidence still remains well below pre-recession levels.
Earlier, a report from the Case-Shiller 20-city composite index showed U.S. house prices rose in May, with every city showing gains. Prices fell on a seasonally adjusted basis, however. Year-over-year growth also slowed down.
Data released Monday showed pending U.S. homes sales fell 1.1% in June, the first decline in four months. That report "confirmed Fed Chair Yellen's remarks before the Senate Banking committee earlier this month about the overall slowdown in the housing sector," wrote Marshall Gittler, head of global FX strategy at IronFX, on Tuesday.
Yellen will lead monetary policy makers in their two-day meeting that begins Tuesday morning.
Ahead of the opening bell, shares of Merck & Co. (>> Merck & Co., Inc.) -- a component of the Dow Jones Industrial Average (DJI) -- rose 1% after the drug maker's adjusted earnings and sales surpassed expectations.
Shares of fellow Dow component Pfizer Inc. (>> Pfizer Inc.) gained 0.8% after the pharmaceutical company's second-quarter results came in ahead of Wall Street's targets.
Wynn Resorts Ltd. (>> Wynn Resorts, Limited) shares dropped 4.2%, after earnings per share beat analysts' expectations, but revenue fell short of them.
Aetna (>> Aetna Inc) opened 1.9% lower even as the health insurer raised its 2014 operating earnings projection based on improvement in second-quarter results from the year-earlier period.
Logistics company United Parcel Service Inc. (>> United Parcel Service, Inc.) dropped 2.9% after missing forecasts and lowering its guidance.
Stock in Herbalife Ltd. (>> Herbalife Ltd.) fell 12%, extending losses from late Monday when the nutritional supplements marketer posted quarterly results that missed Wall Street's targets.
Investors will also keep watch for any update about further sanctions that may be imposed against Russia by the European Union related to its conflict with Ukraine.
After the regular session ends, Twitter Inc. (>> Twitter Inc) is slated to release second-quarter results.
In Asia, most major stock markets ended higher, with Japan's Nikkei Average up 0.6%. In Europe, the U.K.'s FTSE 100 edged higher on upbeat earnings reports.
Oil prices (CLU4) turned slightly lower, while gold (GCU4) rose nearly $5. The U.S. dollar index (DXY), which measures the greenback against a basket of six other currencies, rose to 81.061 from 81.025 on Monday.
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