The Dow and S&P 500 advanced for a second day on Tuesday as consumer confidence data was stronger than expected and investors eyed further progress on a solution to Europe's fiscal mess.

But weak financial shares limited the advance, with the S&P financial index <.GSPF> down 0.4 percent. Shares of Bank of America dropped 2.7 percent to $5.11, on track for their worst close since March 2009. The Nasdaq also was lower.

There seems to be some movement on the European front, but things certainly haven't been resolved. Financials are taking a step back, and are kind of keeping a cap on the market as a whole, said Thomas Villalta, portfolio manager for Jones Villalta Asset Management in Austin, Texas.

In a positive sign for the euro zone, Italian bond yields fell from session highs, though they were still at record high rates. In the auction, Italy's government sold 7.5 billion euros of three- and 10-year bonds, close to the upper end of its target range.

In addition, investors also eyed a meeting of European officials in hopes they will make a step forward in resolving the region's debt crisis.

In the United States, the Conference Board, an industry group, said its index of consumer confidence jumped to its highest level since July, handily topping economists' forecasts.

The news followed record Black Friday sales, giving investors hope that the holiday shopping season will be a solid one for retailers.

The Dow Jones industrial average <.DJI> was up 55.29 points, or 0.48 percent, at 11,578.30. The Standard & Poor's 500 Index <.SPX> was up 4.14 points, or 0.35 percent, at 1,196.69. The Nasdaq Composite Index <.IXIC> was down 8.01 points, or 0.32 percent, at 2,519.33.

On Monday, U.S. stocks rebounded sharply from seven days of losses, with the S&P closing up nearly 3 percent.

Weakness in some large-cap Internet stocks weighed on the Nasdaq after strong gains in those stocks on Monday. dropped 2.3 percent to $189.62.

AMR Corp plunged 78.4 percent to about 35 cents a share after the parent of American Airlines filed for bankruptcy protection and named a new chairman and chief executive. The stock was halted more than a dozen times throughout the day.

(Reporting by Caroline Valetkevitch; Additional reporting by Ryan Vlastelica; Editing by Jan Paschal)