The markets opened higher as investors mulled over the latest batch of corporate earnings news. The Dow rose 78 points to 12,806 while Nasdaq surged 30 points to 2407.

On the upside

Shares of Safeco (NYSE: SAF) soared after Liberty Mutual offered $6.12 billion to create the 5th largest property insurer in the U.S.

Boeing (NYSE: BA), a Dow component, posted higher earnings as backlogs rose to a record high.

Yum Brands (NYSE: YUM) reported higher revenues and earnings. Analysts promptly upgraded the fast-food restaurant operator of KFC, Pizza Hut and Taco Bell outlets.

On the downside

Shares of Ambac Financial (NYSE: ABK) tumbled after the company posted a sizable loss due to mortgage-related bond losses.

Affiliated Managers Group (NYSE: AMG) posted lower profits as the investment manager lost customers and incurred higher costs.

Oil and natural-gas producer XTO Energy (NYSE: XTO) reported higher revenues and profits while raising its guidance. Investors took profits on the stock which was trading near all-time highs.

In the broad market, advancing issues outpaced decliners by a narrow margin on both the NYSE and Nasdaq. The Russell 2000 which tracks small cap stocks added a point to 704.