The market also took comfort from higher guidance from Texas Instruments, a positive signal from the tech sector, but some traders remained cautious in the face of rising bond yields.

The Dow Jones Industrial Average drifted up 7.33 points (0.08 per cent) to 8,771.82 in the first trades after a mixed session for Wall Street on Monday.

The Nasdaq composite added 7.02 points (0.38 per cent) to 1,849.42 and the Standard & Poor's 500 index gained 2.68 points (0.29 per cent) to 941.82.

Analysts said news that the Federal Reserve had cleared major banks to repay the US Treasury for capital injections was another positive sign for the troubled financial sector that could help the overall economy.

Meanwhile the market was encouraged by Texas Instruments' statement late Monday that it expected higher sales and profits in the current quarter.

'There is good news out of the tech sector and good news percolating in the financial sector,' said Patrick O'Hare at Briefing.com. -- AFP