Hopes of a fiscal cliff compromise before tax rises and spending cuts in the new year have seen global markets rise.
US president Barack Obama is cutting short his Christmas break to return to Washington later today and resume negotiations with Republican Congress leaders.
There are hopes that a compromise based on president Obama's offer of a $US400,000 threshold for tax increases may be agreed before January 1.
The All Ordinaries index was up 17 points to 4,663 by 2:46pm (AEDT), while the ASX 200 was 0.3 per cent higher at 4,650, albeit on very low volumes following two public holidays.
In a rare piece of company news today, Fortescue has announced the resumption of its expansion plans.
In September, the company suspended the development of its Kings deposit in Western Australia, as iron ore prices slumped below $US90 a tonne.
However, iron ore prices have risen more than 50 per cent since then, back to $US135 a tonne, causing Fortescue to restart its Kings development in January.
The expansion is due to be completed by the end of next year, and Fortescue's shares were up 3.3 per cent.
Retailers have also gained as queues outside the major department stores' CBD locations provided evidence that bricks and mortar shopping is not yet dead.
This year the department stores are also hoping online sales will put some icing on that post-Christmas cake.
Retail lobby groups have estimated that around $1.8 billion was spent yesterday alone.
That has seen Myer shares up 2.4 per cent to $2.12, and David Jones shares have risen 2.6 per cent.
However, the major banks have been a drag on the market.
Three of the big four are slightly lower, with the Commonwealth Bank's 0.5 per cent decline leading the falls.
The Australian dollar was down slightly at 103.65 US cents.