US stocks claw out gains on Greece hopes

The Dow Jones Industrial Average rose 33.07 points (0.26 per cent) to finish the session at 12,878.20.

The broad-based S&P 500 added 2.72 points (0.20 per cent) to 1,347.05 while the Nasdaq Composite edged up 2.09 points (0.07 per cent) to 2,904.08.

Stocks started the session on a sour note but finished with gains after positive noises out of Europe.

"Fueling the bulls were escalating hopes for a Greek debt deal, with the country's lawmakers reportedly close to securing multi-agency bailout funds by agreeing to extra austerity measures," said Andrea Kramer at Schaeffer's Investment Research.

Traders also kept an eye on Federal Reserve chairman Ben Bernanke, who in testimony to the Senate Budget Committee reiterated his concerns about high levels of US unemployment just days after a surprisingly large drop in the jobless rate.

Investors cheered better-than-expected earnings from Dow member Coca-Cola and fast-food giant Yum! Brands, owner of the Kentucky Fried Chicken and Pizza Hut chains.

Both companies reported strong sales growth in China. Coca-Cola was up 0.8 per cent and Yum! jumped 2.6 per cent.

McDonald's led the Dow higher, adding 1.4 per cent.

Citigroup fell 0.7 per cent. The bank said it had won permission to issue credit cards in China, a first for a foreign bank.

US telecom giant Verizon dropped 0.6 per cent and Coinstar, operator of Redbox movie rental kiosks, leaped 13.8 per cent after announcing a joint venture to launch an online streaming video service to challenge market leader Netflix.

Netflix fell 1.1 per cent.

Oracle slipped 0.2 per cent after rejecting a $272 million damages award in its copyright infringement lawsuit against German business software rival SAP and asking for a new trial.

Bond prices fell.

The yield on the 10-year Treasury rose to 1.97 per cent from 1.90 per cent on Monday, while the 30-year increased to 3.14 per cent from 3.09 per cent.

Bond prices and yields move in opposite directions.