* Staples, Office Depot in advanced merger talks - WSJ
* Stratsys drops after cutting outlook
* Indexes up: Dow 1.04 pct, S&P 0.89 pct, Nasdaq 0.7 pct (Updates to market open, adds quote)
By Chuck Mikolajczak
NEW YORK, Feb 3 (Reuters) - U.S. stocks jumped at the openon Tuesday, with the benchmark S&P 500 index poised to continuea rally fueled by hopes of a deal on Greek debt and by firmeroil prices.
Stocks rallied late in the prior session on signs Greece wassoftening its approach to debt negotiations. A source toldReuters that Greek Finance Minister Yanis Varoufakis, in Londonto reassure private investors he was not seeking a showdown withBrussels over a new debt agreement, said the new left-winggovernment would spare privately held bonds from losses.
Adding support was a further gain in oil prices, with U.S.crude up 2 percent to $50.56 and Brent up 2.1 percent to $55.89.The advance came after BP said it would cut capitalexpenditure, raising expectations a supply glut will be eased.Shares of offshore contract driller Transocean gained 8.5percent to $18.75.
"The market is beginning to see signs of some stabilitycoming into oil and the Greek situation seems to be tiltingtowards the side of what the market is looking for, which is aretreat from its call for a debt writedown," said Andre Bakhos,managing director at Janlyn Capital LLC in Bernardsville, NewJersey.
"So the market is latching on to a better Greek situation."
The Dow Jones industrial average rose 181.26 points,or 1.04 percent, to 17,542.3, the S&P 500 gained 18.06points, or 0.89 percent, to 2,038.91 and the Nasdaq Composite added 32.89 points, or 0.7 percent, to 4,709.58.
According to Thomson Reuters data through Monday morning, of226 companies in the S&P 500 to report results, 73 percent beatexpectations. The expected growth rate for the quarter sits at5.4 percent, down from 11.2 percent expected on Oct. 1.
Stratasys shares plunged 34.2 percent to $52.67after the company cut its 2014 adjusted profit estimates for asecond time.
Office Depot shares surged 20.6 percent to $9.20after the Wall Street Journal reported the company was inadvanced talks to merge with Staples Inc. Staplesshares jumped 11.9 percent to $19.18.
In other merger news, Advent Software agreed to beacquired by SS&C Technologies for $2.7 billion in cash,sending shares up 5.6 percent to $43.70.
Economic data expected Tuesday includes December factoryorders at 10:00 a.m. (1500 GMT) and U.S. vehicle salesthroughout the day. General Motors said January U.S.sales were up 18.3 percent while Ford Motor posted a 15percent increase for the month.
Advancing issues outnumbered declining ones on the NYSE by2,149 to 653, for a 3.29-to-1 ratio on the upside; on theNasdaq, 1,703 issues rose and 594 fell for a 2.87-to-1 ratiofavoring advancers.
The benchmark S&P 500 index was posting 11 new 52-week highsand no new lows; the Nasdaq Composite was recording 28 new highsand 11 new lows. (Editing by Bernadette Baum)
BP (BP.)