* Pfizer rises after results, boosting the Dow
* Apple shares volatile following results, outlook
* Retail sales dip in Sept, shutdown weighs on confidence
* Indexes up: Dow 0.3 pct, S&P 0.2 pct, Nasdaq 0.1 pct
NEW YORK, Oct 29 (Reuters) - U.S. stocks rose modestly on Tuesday, with the market's upward momentum continuing as the S&P 500 hit another record high and drug company Pfizer rallied on its results.
The gains came despite some weak economic data, which underpinned expectations that the U.S. Federal Reserve was unlikely to begin reducing its stimulus policy.
Volatile movement by Apple Inc following its results also capped gains. With the S&P 500 on track for its ninth rise out of the past 10 sessions, some analysts said the rally may be running out of steam.
The Dow Jones industrial average was up 39.74 points, or 0.26 percent, at 15,608.67. The Standard & Poor's 500 Index was up 3.77 points, or 0.21 percent, at 1,765.88, exceeding Monday's record of 1,762.11. The Nasdaq Composite Index was up 2.46 points, or 0.06 percent, at 3,942.59.
Equities have been on a tear for the past couple weeks, with the benchmark S&P 500 hitting a series of record highs on expectations the Federal Reserve will keep its bond buying in place after its policy committee meets Tuesday and Wednesday. The Dow is less than 1 percent away from its all-time closing high.
"The market is becoming more selective right now," said Kaufman. "We still don't have many sellers, but buying is becoming subdued. At some point the selling will kick in and we'll see a pullback."
Pfizer Inc rose 1.3 percent to $31.13, boosting the Dow after the pharmaceutical company reported third-quarter earnings that beat expectations.
Apple late Monday forecast first-quarter revenue of $55 billion to $58 billion, compared with expectations for $55.65 billion. Shares rose as much as 1.8 percent in early trading but subsequently dipped 0.2 percent to $528.09.
"Apple had a strong report and that's helping the market at large given how influential it is in its size," said Wayne Kaufman, chief market analyst at Rockwell Securities in New York. "We've been recommending the stock for a while, and as it is entering what is typically its strongest period, I don't foresee too many problems for the stock from here."
Aetna Inc reported adjusted third-quarter earnings that missed expectations and gave a full-year profit outlook that was largely below estimates. The stock fell 1.5 percent to $60.84.
With half of S&P 500 companies having reported, 69.1 percent have topped profit expectations, above the long-term average of 63 percent, according to the latest Thomson Reuters data. However, only 53.9 percent have beaten revenue estimates, below the 61 percent rate since 2002.
In economic news, U.S. retail sales dipped 0.1 percent in September, compared with economists' expectations of a 0.1 percent increase. Producer prices rose 0.1 percent in September, as expected.
Home prices rose 0.9 percent in August, more than had been expected, according to the S&P/Case Shiller index. Consumer confidence fell more than expected in October, dropping to 71.2, below forecasts for a reading of 75. Confidence was likely pressured in the month by the partial U.S. government shutdown.
Michael Kors rose 1 percent to $77.24 after Standard & Poor's said the company would be added to the S&P 500 as of Nov. 1, replacing NYSE Euronext.
Yahoo Inc rose 4.9 percent to $33.93 after Bernstein upgraded the stock to "outperform."