Stocks are higher in early trading as traders were encouraged by signs of progress in budget talks and a prediction of steady economic growth next year.
The Dow Jones industrial average rose 42 points to 13,177 shortly after the opening bell Monday. The Standard & Poor's 500 index rose six to 1,419 and the Nasdaq rose 14 to 2,985.
A survey of business economists released by the National Association for Business Economics shows that most believe modest growth will continue next year, led by rising demand for housing. The group expects growth of 2.1 percent following 2.2 percent growth in 2012.
Republican House Speaker John Boehner edged slightly closer to President Barack Obama's key demands as they try to avert the tax hikes and spending cuts that are set to take effect in the new year.
Sources familiar with the talks confirmed that Boehner proposed extending low tax rates for everyone who has earned less than $1 million, and rates would rise for wages above that. But Boehner's new positions were still far from those held by Obama.
"It does solidify that a deal is very close and it could be announced by the end of this week," said Peter Cardillo, chief market economist at Rockwell Global Capital in New York. "We could be surprised. We could actually have a Santa gift that a deal has been reached."
Uncertainty over when and if a federal budget deal will be done has kept investors cautious in what is already a normally quiet trading period heading into year-end.
Investors are worried the economy could slide back into recession if the full brunt of the tax and spending changes is allowed, though most expect a deal will eventually be reached.
Despite the uncertainty of fiscal cliff talks, the S&P has performed well in the last month, grinding higher in mostly light volume.
Clearwire agreed to sell the rest of the company to Sprint Nextel for a slightly sweeter $2.2 billion offer, days after minority shareholders criticized the previous bid as too low. Clearwire tumbled 8.6 percent to $3.08, while Sprint was up 1.8 percent at $5.65.
Apple reversed earlier losses and was up 0.5 percent at $512.23 even as Citigroup cut its rating to 'neutral' from 'buy' and slashed its price target to $575 from $675.
Apple shares have tumbled nearly 30 percent in about three months, losing 3.8 percent on Friday alone and helping lead the overall market lower.
The Associated Press and Reuters contributed to this report. The tech giant said it sold more than 2 million of its new iPhone 5 smartphones in China during the three days after its launch there on Friday, but the figures did not ease worries about stiffer competition.