Stocks firm as US rate cut outlook tempers Japan bond unease

Stocks steadied Tuesday following the previous day's stutter, as weak data reinforced optimism for US interest rate cuts and tempered concerns over rising Japanese bond yields.

Expectations that the Federal Reserve will lower borrowing costs have buoyed markets in recent weeks, helping them recover early November's losses driven by tech bubble fears.

Wall Street's main stock indices were mostly higher in late morning trading, but had lost much of their early gains.

"The early buying interest reflects more of the back-and-forth action of a market playing the seasonality game while remaining cognizant of stretched valuations and concentration risk," said Briefing.com analyst Patrick O'Hare.

He added investors were keeping an eye on the US Treasuries market, a day after a jump in yields