* 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 open on Tuesday, with the benchmark S&P 500 index poised to continue a rally fueled by hopes of a deal on Greek debt and by firmer oil prices.
Stocks rallied late in the prior session on signs Greece was softening its approach to debt negotiations. A source told Reuters that Greek Finance Minister Yanis Varoufakis, in London to reassure private investors he was not seeking a showdown with Brussels over a new debt agreement, said the new left-wing government 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 capital expenditure, raising expectations a supply glut will be eased. Shares of offshore contract driller Transocean gained 8.5 percent to $18.75.
"The market is beginning to see signs of some stability coming into oil and the Greek situation seems to be tilting towards the side of what the market is looking for, which is a retreat from its call for a debt writedown," said Andre Bakhos, managing director at Janlyn Capital LLC in Bernardsville, New Jersey.
"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 18.06 points, 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, of 226 companies in the S&P 500 to report results, 73 percent beat expectations. The expected growth rate for the quarter sits at 5.4 percent, down from 11.2 percent expected on Oct. 1.
Stratasys shares plunged 34.2 percent to $52.67 after the company cut its 2014 adjusted profit estimates for a second time.
Office Depot shares surged 20.6 percent to $9.20 after the Wall Street Journal reported the company was in advanced talks to merge with Staples Inc. Staples shares jumped 11.9 percent to $19.18.
In other merger news, Advent Software agreed to be acquired 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 factory orders at 10:00 a.m. (1500 GMT) and U.S. vehicle sales throughout the day. General Motors said January U.S. sales were up 18.3 percent while Ford Motor posted a 15 percent increase for the month.
Advancing issues outnumbered declining ones on the NYSE by 2,149 to 653, for a 3.29-to-1 ratio on the upside; on the Nasdaq, 1,703 issues rose and 594 fell for a 2.87-to-1 ratio favoring advancers.
The benchmark S&P 500 index was posting 11 new 52-week highs and no new lows; the Nasdaq Composite was recording 28 new highs and 11 new lows. (Editing by Bernadette Baum)