Energy shares led U.S. stocks to modest gains on Tuesday as crude prices jumped, but consumer-related and transportation shares limited the rise.
Stocks pared gains on stronger-than-expected profits and outlooks after the first day of quarterly earnings reports.
U.S. crude futures settled 2 percent higher at $91.11 per barrel after new production snags added to supply concerns even as the Trans Alaska Pipeline remained shut, idling 12 percent of U.S. oil production.
There's a big feeling were going to have $100 barrel oil pretty quickly, said Shawn Hackett, president at Hackett Advisors in Boynton Beach, Florida.
He said that is clearly bullish for the sector, but oil above $90 a barrel could take disposable income away from the economy and could hurt demand.
Airline shares were hit by the rise in crude, with the NYSE Arca airline index <.XAL> off 1.5 percent and the Dow Jones transport average <.DJT> lost 1 percent after hitting its highest in more than two years on Monday. The S&P retail index <.RLX> dipped 0.3 percent.
The Dow Jones industrial average <.DJI> added 23.31 points, or 0.20 percent, to 11,660.76. The Standard & Poor's 500 <.SPX> rose 2.76 points, or 0.22 percent, to 1,272.51. The Nasdaq Composite <.IXIC> gained 4.87 points, or 0.18 percent, to 2,712.67.
Among companies reporting fourth-quarter results higher than expected was homebuilder Lennar Corp
The PHLX Housing sector index <.HGX> gained 1.5 percent.
Stocks have rallied in recent weeks on optimism about profits, but the S&P 500 ended down the past three sessions, leading some analysts to question the rally's durability.
When you see a market going up in the morning and pulling back later in the day, it's saying there's some distribution going on, and at some point it may lead to a well overdue correction, Hackett said.
Retailers were also hit as women's clothier Talbots Inc
Leading declines on the Dow, Verizon Communications Inc
Short-term technical resistance for the benchmark is seen round 1,280 while the area between 1,265 and 1,260 provides support.
Sears Holding Corp
(Reporting by Rodrigo Campos; additional reporting by Alina Selyukh; Editing by Kenneth Barry)