Stocks mostly rose for a second straight day on Tuesday as a rebound in consumer confidence and soothed fears over Europe whetted investors' appetite for risky assets.
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.
It is a great sign that the auction was oversubscribed, suggesting that we seem to be moving forward with progress there, said Paul Zemsky, the New York-based head of asset allocation for ING Investment Management.
That said, the yields remain quite high, so we're not sounding an all-clear just yet, added Zemsky, who helps oversee $445 billion.
The Conference Board, an industry group, said its index of consumer confidence jumped to its highest level since July, handily topping economists' forecasts.
I don't know how long the impact will last, but it (consumer confidence data) did give us a nice pop, especially coming on the growing optimism that a European deal will be done, said Phil Flynn, senior market analyst with PFG Best in Chicago.
The Dow Jones industrial average <.DJI> rose 68.46 points, or 0.59 percent, at 11,591.47. The Standard & Poor's 500 Index <.SPX> added 6.16 points, or 0.52 percent, to 1,198.71. The Nasdaq Composite Index <.IXIC> slipped 5.27 points, or 0.21 percent, to 2,522.07.
Weakness in some large-cap Internet stocks forced the Nasdaq to give up its morning gains. Amazon.com Inc
Despite the pullback, retailers remain optimistic about the holiday shopping season after the strong Black Friday and Cyber Monday shopping days.
Among other Internet names, Netflix Inc
Tiffany & Co
In other economic data, U.S. single-family home prices declined in September, highlighting the fragility of a market that is struggling to get back on its feet, according to the S&P/Case-Shiller composite index.
On Monday, U.S. stocks rebounded sharply from seven days of losses, with the S&P closing up nearly 3 percent.
(Reporting by Ryan Vlastelica; Editing by Jan Paschal)