Stocks start the week on a positive note

NEW YORK (CNNMoney) — Stocks opened higher Monday morning, as investors welcomed a report showing a larger-than-expected increase in personal income and saving.

However, the gains were somewhat muted as the ongoing tension in Libya continues to underpin sentiment.

At the opening bell, the Dow Jones industrial average (INDU) rose 35 points, or 0.3%, the S&P 500 (SPX) ticked up 3 points, or 0.2%, and the Nasdaq (COMP) rose 9 points, or 0.4%.

U.S. stocks closed solidly higher Friday, butfears about Libya and the oil market translated into the worst week for stocks since November.

Despite the recent volatility, stocks are off to a strong start this year. The major indexes are all up nearly 5% so far in 2011.

Bruce McCain, chief investment strategist at Key Private Bank, said he thinks the market will continue to move higher, barring any escalation in geopolitical risks.

“The news has been largely positive for equities and there is a bias towards seeing the positive side of things,” he said. “As long as the geopolitical situation doesn’t get significantly worse, investors will continue to focus on what has been by-and-large good economic news.”

Meanwhile, investors were generally unfazed by a potential shutdown of the federal government, which could occur if Congress fails to approve a spending bill before midnight Friday.

Economy: A report from the Commerce Department showed that personal income jumped 1%, while spending by individuals rose 0.2% in January.

Economists were looking for personal incomes to rise 0.3%, and the personal spending figure was expected to go up 0.4%.

Later Monday morning, the Chicago purchasing managers index will be released, followed by pending home sales at 10 a.m. ET from the National Association of Realtors.

The Chicago PMI is expected to decline slightly to 67.5 from last month’s 68.8, and pending home sales are expected to fall 3.2%.

Economic data due later this week include the national PMI from Institute for Supply Management on Tuesday, and the government’s monthly payroll report on Friday.

Companies: Little corporate news is due out on Monday. Auction house Sotheby’s (BID) will report after the market close.

World markets: European stocks were up in afternoon trading. Britain’s FTSE 100 was flat, while the DAX in Germany ticked up 1.3% and France’s CAC 40 edged up 1.1%.

Asian markets ended the session higher. The Shanghai Composite added 0.9%, the Hang Seng in Hong Kong gained 1.4% and Japan’s Nikkei rose 0.9%.

Currencies and commodities: The greenback fell against the euro and the British pound, but rose versus the Japanese yen.

Oil for April delivery slipped 23 cents to $97.65 a barrel.

Gold futures for April delivery rose $1.60 to $1,410.90 an ounce.

Bonds: The price on the benchmark 10-year U.S. Treasury rose, pushing the yield down to 3.42% from 3.59% late Friday.