U.S. stocks open moderately higher, data ahead; Dow Jones up 0.14%

U.S. stocks opened moderately higher on Tuesday, as markets eyed the release of U.S. data, as well as a slew of first-quarter earnings reports later in the trading session.

During early U.S. trade, the Dow 30 added 0.14%, the S&P 500 edged up 0.13%, while the Nasdaq gained 0.43%.

U.S. equities had found support last week after upbeat data on manufacturing and employment pointed to underlying strength in the economy.

The Labor Department reported the number of people filing for unemployment benefits edged up to 304,000, below analysts’ forecasts and not far from the six-and-a-half year low of 300,000 touched the previous week.

The pharmaceutical sector was particularly active, as Allergan (NYSE:AGN), the maker of the Botox wrinkle treatment, skyrocketed 14.29% amid reports it is being targeted for a takeover by Valeant Pharmaceuticals (NYSE:VRX) with Pershing Square Capital Management LP after rebuffing merger efforts for more than a year.

Separately, Pfizer (NYSE:PFE) rose 0.32% as the company was expected to come back to bid for British drug company Astrazeneca (AZN.LSE), after its £60 billion takeover approach was rejected.

In the financial sector, Citigroup (NYSE:C) added 0.17% after the U.S. lender said it is seeking bidders for about 50 branches holding $3 billion in California.

Among internet-related companies, Netflix (NASDAQ:NFLX) surged 7.35% after saying it plans to charge new customers $1 to $2 a month more for its online video service, starting later this quarter. The announcement came a day after the company reported first-quarter profit and subscriber growth that beat analysts' estimates.

Amazon.com (NASDAQ:AMZN) rallied 1.24%, despite a report by Ohio State University researchers showing that sales declined in states that are collecting an online sales tax.

In earnings news, McDonald's (NYSE:MCD) posted falling sales at its established U.S. locations and first-quarter profit that trailed analysts' estimates, but added that global comparable-store sales are expected to be 'modestly positive' in April. Shares edged down 0.07% at the open of the U.S. trading session.

United Technologies (NYSE:UTX) raised the lower end of its 2014 earnings forecast after beating analysts's first-quarter profit estimates, sending shares in the maker of aircraft parts and Otis elevators up 1.27%.

Other stocks likely to be in focus included Comcast (NASDAQ:CMCSA), AT&T (NYSE:T), Juniper Networks (NYSE:JNPR), Yum! Brands (NYSE:YUM), Lockheed Martin (NYSE:LMT), Harley-Davidson (NYSE:HOG) and Bank Of New York Mellon (NYSE:BK), all scheduled to report quarterly results later in the day.

Across the Atlantic, European stock markets were sharply higher. The DJ Euro Stoxx 50 jumped 1.16%, France’s CAC 40 advanced 1.03%, Germany's DAX surged 1.63%, while Britain's FTSE 100 rallied 1.03%.

During the Asian trading session, Hong Kong's Hang Seng slipped 0.13%, while Japan’s Nikkei 225 declined 0.85%.

Later in the day, the U.S. was to release private sector data on existing home sales.