Stocks rose on Tuesday on strong U.S. consumer confidence data, but gains were capped after a report showed a drop in durable goods orders.
Consumer confidence in the world's largest economy rose to a one-year high in February, according to a survey, as optimism about the labor market offset concerns over rising gasoline prices. The reading is key because consumer spending accounts for more than two-thirds of U.S. economic activity.
This continues the trend we've seen over the past few months where we're getting data that indicates things are getting better, said Mike Shea, managing partner and trader at Direct Access Partners in New York.
The Dow Jones industrial average <.DJI> was up 18.92 points, or 0.15 percent, at 13,000.43. The Standard & Poor's 500 Index <.SPX> was up 3.57 points, or 0.26 percent, at 1,371.16. The Nasdaq Composite Index <.IXIC> was up 19.15 points, or 0.65 percent, at 2,985.31.
The S&P ticked above 1,370 but some analysts warned a rally this year has come in light volume, and any more gains could trigger selling. Still, a close above 1,370 could invite momentum buying as money managers chase performance.
From that standpoint, it would be good for us to close above 1,370, Shea said. If we get any sort of uptick in volume, that will be very positive for the market. If volume stays at this level, it might be more likely that we pull back.
Daily volume on the New York Stock Exchange, NYSE Amex and Nasdaq has averaged 6.89 billion shares so far in February. The average in February 2011 was 7.81 billion.
Separate reports showed durable goods orders fell in January by the most in three years and home prices declined in December, suggesting the economy may have started the year on a weaker foot than expected.
Technology shares were among the best performers, with Micron Technology Inc
The PHLX semiconductor index <.SOX> rose 1.8 percent.
With earnings season drawing to a close, 472 of the S&P 500 components have reported results. About 63 percent beat analysts' expectations, below the average 70 percent beat rate in the last four quarters but slightly above the average of 62 percent since 1994.
Europe's banks were expected to take in another half trillion euros in cheap three-year loans offered by the ECB on Wednesday in a bid to inject liquidity into the fragile banking system.
Brent crude futures were off and hovered near $123, halting a surge that has threatened to hurt the global economy. Equity investors were still on their toes on persistent concerns over supply from the Middle East, but analysts said economic news will continue to be the driving force behind the U.S. equities market.
(Reporting by Rodrigo Campos, additional reporting by Angela Moon and Ryan Vlastelica; editing by Jeffrey Benkoe)