U.S. stocks advanced in early trade on Tuesday as stronger-than-expected Chinese trade data and Microsoft's $8.5 billion deal to buy the Skype buoyed sentiment.

The S&P 500 Index gained 5.30 points, or 0.39 percent, to trade at 1,351.48 at 9:55 a.m. EDT. The Dow Jones Industrial Average rose 34.58 points, or 0.27 percent, to trade at 12,719.26. The Nasdaq Composite Index gained 0.47 percent.

China's trade surplus rose to $11.4 billion in April compared to $1.68 billion in the same period last year and $140 million in March.

Import Price Index, which measures the change in the price of imported products into the US, rose 2.2 percent in April compared to 2.6 percent gain in March and against analysts’ expectations of 1.8 percent.

On the corporate front, shares of Microsoft Corp. (NASDAQ:MSFT) declined 1.43 percent after the tech giant said it would pay $8.5 billion to buy the popular Voice over Internet Protocol service Skype.

Dean Foods Co. (NYSE:DF) shares climbed 13.57 percent to $12.44 in early trading session after the company raised its fiscal 2011 earnings forecast. The company now expects fiscal 2011 earnings to be in the range of $0.67 to $0.75 per share compared to its earlier estimation of $0.55 to $0.65 per share and against analysts’ estimation of $0.58 per share.

CKX Inc. (NASDAQ:CKXE) stock jumped 22.81 percent to $5.47 in early trading session. Profit for the first quarter was $7.19 million or $0.08 per share, compared to a loss of $5.03 million or $0.05 per share last year. Revenue fell to $53.29 million from $66.65 million.

The euro declined 0.25 percent to 1.4332 against the dollar and the yen declined 0.32 percent against the greenback.

Crude oil futures declined 1.37 percent to $101.15/barrel and gold futures rose 0.40 percent.

European stock markets are currently trading higher with FTSE 100 up by 59.04 points, DAX30 up by 91.94 points and CAC 40 up by 54.88 points.