Traders work on the floor of the New York Stock Exchange
Traders work on the floor of the New York Stock Exchange December 3, 2010. REUTERS

US stocks advanced in early trade on Tuesday, following better-than-expected reports on retail sales and producer prices.

The S&P 500 Index advanced 1.54 points, or 0.12 percent, to trade at 1,242.06 at 10:00 a.m. EDT. The Dow Jones Industrial Average advanced 23.46 points, or 0.21 percent, to trade at 11,452.02. The Nasdaq Composite Index gained 0.13 percent.

The U.S. retail sales continued to rise in November for the fifth month, boosted by holiday shopping as well as fuel prices. Retail sales in November rose 0.8 percent to $378.7 billion from October. It was up 7.7 percent from the same period last year.

Producer prices for finished goods in the U.S. rose more than expected in November, posting an increase for the fifth straight month. Producer price index (PPI) increased 0.8 percent in November mainly driven up by a 2.1 percent increase in energy goods, while markets had expected the index to rise by 0.5 percent in November.

Investors are focused on FOMC meeting and interest rate decision, which is due to be released at 2:15 pm EDT. The interest rate is expected to remain unchanged at 0.25 percent.

Investors will be waiting to hear what the Fed will say about the developments in the economy, from the tax-cut effects to the decision whether to extend QE beyond $600 billion.

On the corporate front, Best Buy shares declined 14.4 percent after reporting 4.4 percent drop in third- quarter profit and lowered its full-year outlook.

Shares of Amgen Inc. surged 5.52 percent as the company announced encouraging results from a Phase 3 trial evaluating XGEVA versus placebo in men afflicted with castrate-resistant prostate cancer.

Sanderson Farms declined 1.39 percent despite better-than-expected fourth quarter earnings. The company's fourth quarter profit was $47.8 million or $2.08 a share, up from $19.8 million or $0.95 a share last year.

The euro declined 0.07 percent to 1.3382 against the dollar and the yen declined 0.08 percent against the greenback.

Crude oil futures declined 0.82 percent to $87.88/barrel and gold futures fell 0.28 percent.

European stock markets are currently trading mixed with FTSE100 up by 13.12 points, DAX30 down by 9.55 points and CAC 40 down by 1.55 points.