U.S. stocks edged higher on Tuesday, as better-than-expected consumer confidence data and strong quarterly results from Travelers and Apple offset concerns about a Chinese government clampdown on bank lending.

Consumer confidence rose for a third straight month to its highest level since September 2008, according to the Conference Board.

The markets initially opened lower after sources said China's central bank told some banks to increase their reserve ratios by 0.5 percentage point, effective Tuesday.

Strong confidence is important and why we had a rebound in markets, said Alan Lancz, president of Alan B. Lancz & Associates in Toledo, Ohio. However, there are still a lot of uncertainties about China and banking regulations that have investors in a quandary.

The Dow Jones industrial average <.DJI> rose 40.81 points, or 0.39 percent, at 10,237.14. The Standard & Poor's 500 Index <.SPX> added 2.31 points, or 0.21 percent, at 1,098.81. The Nasdaq Composite Index <.IXIC> gained 6.05 points, or 0.27 percent, at 2,216.72.

The Dow was helped after Travelers Cos Inc , the property-casualty insurer, reported quarterly profits rose and beat estimates. The stock was up 3.3 percent to $50.45 and was the Dow's top boost.

In a heavy day of earnings report, DuPont, Johnson & Johnson and Verizon Communications Inc all reported on Tuesday. J&J fell 1.2 percent to $64.45, while Verizon lost 2.1 percent to $30.03. The two were the top two drags on the Dow. DuPont fell 0.6 percent at $32.63.

Apple Inc rose 1.6 percent to $206.33 and Texas Instruments Inc added 0.6 percent to $23.84, a day after both reported results.

In another key piece of economic data, U.S. home prices in 20 major metropolitan areas slipped unexpectedly in November, a bearish sign.

(Editing by Jeffrey Benkoe)