The yield on the 10-year Treasury note used in figuring mortgages and other consumer loans climbed 4 basis points to 2.71 percent. The dollar fell against the currencies of major U.S. trading partners.
Oil futures for December delivery rose 31 cents, or 0.3 percent, to $93.34 a barrel; gold prices rose $1.20, or 0.1 percent, to $1,273.50 an ounce.
Home Depot, the world's largest home-improvement retailer, beat profit and sales expectations for the third quarter and hiked its fiscal-year forecast, with its shares hitting all-time highs.
The retailer's results point to "further consumer strength, and once again is suggesting the consumer is better positioned and taking advantage of the recovery, employment, house prices and the de-leveraging of the balance sheet, and that things are looking good," said Wilkinson.
Best Buy cautioned its strategy of keeping pace with discounts offered by rivals during the holiday season would dent fourth-quarter profits, with shares of the consumer-electronics retailer hit.
"Clearly Home Depot is benefiting from interest rates that are low housing that is strong, while Best Buy is suffering from severe price discounts. I wouldn't be surprised to see Amazon win that battle," said Russell.
Campbell Soup's first-quarter results fell short of estimates, with the company cutting its outlook for the year.
Tesla Motors rose after CEO Elon Musk said he was taking steps as a result of battery-related blazes in his company's Model S electric cars, including higher ground clearance to make them less likely to hit road debris. The U.S. National Highway Traffic Safety Administration has started an investigation into fires related to its electric cars.
Answering questions after a speech to the Illinois Bankers Association Midwest Bank Leaders Conference, Chicago Fed President Charles Evans on Tuesday said he was "not in a hurry" to begin tapering, and noted the decision on a December taper would be tough, but data dependent.
"The FOMC statement at the end of October was remarkably optimistic; it would not surprise me if what we learned from the minutes is if they say, 'let's commence the tapering in December if there is limited impact of a government shutdown.' So there might be a surprise tomorrow," said Andrew Wilkinson, chief economic strategist at Miller Tabak & Co.
"The market is having a bit of a rethink of the impact over tapering; you don't need the Fed buying $85 billion a month, if it's $80 billion or $75 billion three or four months from now, it's a tiny pin prick," said Wilkinson, referring to the central bank's asset purchases.
Russell had a differing view, citing the 7.3 percent unemployment rate and sufficiently weak statistics on inflation as reasons the Fed "can't take the foot off the accelerator."
We would look for the possibility of the Fed pushing tapering into 2014 at the very least, and perhaps even carry it further, which of course is good news for stocks, as the party continues," he added.
Data out during Tuesday's session included third-quarter employment costs, which rose marginally in the third quarter, pointing to tame wage inflation that should let the Fed maintain its bond-buying program.