Stocks continued to trade higher Tuesday after a handful of mostly strong economic reports, and despite weak earnings from leading electronics retailer Best Buy, as investors await news from the Federal Reserve's meeting this afternoon.
The Dow Jones Industrial Average rose more than 50 points, a day after stocks ended mixed as retailers fell.
Boeing, Caterpillar and Johnson &Johnson rose, while JPMorgan and Coca-Cola fell.
The S&P 500 and the Nasdaq also gained. The CBOE Volatility Index, widely considered the best gauge of fear in the market, fell to below 18.
Health care, telecome and industrials sectors advanced, while materials slipped.
The dollar gained modestly against a basket of currencies, while the euro fell. The stronger dollar led to gold easing gains to about $1,397 an ounce, down from an earlier one-week high of $1,406.65. The price of oil, meanwhile, fell to about $88 a barrel.
U.S. business inventories rose 0.7 percentto $1.42 trillion in October, less than expected, the Commerce Department said Tuesday. Inventories were at their highest level since February 2009. Inventories rose an upwardly revised 1.3 percent in September.
Retail sales rose 0.8 percent in November, and 1.2 percent not including auto sales, the Commerce Department said Tuesday. Economists surveyed by Reuters had expected retail sales to rise 0.6 percent in November. October retail sales were revised up 1.7 percent from a previously reported 1.2 percent rise. Sales were up 7.7 percent from November last year.
Producer prices, meanwhile, rose 0.8 percent in November, more than expected as energy prices soared, according to the Labor Department. Core PPI, which excludes food and energy costs, rose 0.3 percent, slightly above an expected 0.2 percent rise.
The retail sales news may ease some concerns raised earlier by Best Buy, which reported a decline in quarterly earnings and a reduced full-year outlook. Best Buy shares sank.
The retail sales data did show that electronics sales fell 0.6 percent in November.
Futures earlier were positive but with investors hesitant to put a lot of money to work until the Federal Open Market Committee weighs in on its program of bond buying later in the day. No change in interest rates is expected.
Any more insight into the Fed's plan to buy $600 billion in Treasury securities will be closely watched, but economists say it's unlikely Fed Chairman Ben Bernanke and company will waver from the current program.
Confidence among U.S. small business owners continued to rise, reaching a three-year high last month, according to the National Federation of Independent Business. An optimism index put out by the group rose 1.5 points to 93.2, the highest reading since December 2007.
At 10 a.m., the latest numbers on business inventories will be released.
Best Buy's performance was hurt by a decline in electronics, particularly televisions. Related stocks slumped on the news, including Corning , which makes components for televisions and Sony , which makes televisions. Best Buy rival Radioshack also fell.
Other retailers were mostly higher after the retail sales news. Among apparel companies, Ann Taylor , Abercrombie & Fitch and Urban Outfitters rose, although Zumiez and Talbots fell. High end retailers all advanced, including Tiffany , Coach , Saks and Nordstrom's .
Elsewhere, Yahoo fell after news the Internet site said it will lay off more than 600 employeesas soon as Tuesday. The cuts will come mostly from the product group, Reuters reported.
Comcast shares gained after two brokerages raised their ratings on the Internet and cable company. Nomura started Comcast with a "buy" rating and a $25 price target, and while Bernstein raised Comcats to "outperform" from "market perform," and boosted its price target to $26 a share from $20.
Nomura, which began covering the cable and satellite industry with a "neutral" rating," initiated Cablevision with a "buy" rating and $40 price target and TimeWarner with "buy" rating and an $80 price target. Directtv and DISHNetwork were started with "neutral" ratings.
Shares of Research in Motion gained after Wedbush raised the Blackberry maker's price target to $58 a share from $51, and FBN Securities raised its rating on the company to "outperform" from "sector perform."
Netflix slumped for the second day in a row to its lowest level in about three weeks.
In health care news, Emergency Medical Services' shares soared after the provider of emergency medical services confirmed it was reviewing strategic alternatives.
Amgen rose after the biotech firm reported successful resultsfor Xgeva, a drug to prevent bone complications in prostate cancer patients. The U.S. Food and Drug Administration to approve Xgeva on Nov. 18, 2010.
Pfizer named George Lorch as its chairman and also raised its dividend more than 10 percent.
The Carlyle Group's HCR ManorCare sold most of its real estate assets to HCP , a health care real estate investment trust in a $6.1 billion sale and leaseback deal, according to Reuters. Carlyle and ManorCare's management will remain as owners of the operating company.
Among financials, Huntington Bancshares declined, while First Horizon National rose after the regional banks both sold stock to repay the government. The stock sales were sold at a discount to Monday's closing stock prices.
Sanderson Farms fell slightly despite reporting profits Tuesday that were double expectations for the fiscal fourth quarter, and more than expected by analysts. The results reflected rising prices and strong demand for the poultry producer, however, Sanderson continues to face headwinds from rising food costs and a supply glut.
In global markets, European stocks were mixed in midday trading, while the major markets in Asia finished higher.
On Tap This Week:
TUESDAY: FOMC meeting announcement.
WEDNESDAY: CPI, credit card default rates, MBA mortgage applications, New York manufacturing survey, industrial production, housing market index, oil inventories; Honeywell's 2011 outlook and Atlanta Fed Pres Lockhart speaks.
THURSDAY: Housing starts, jobless claims, Philadelphia Fed survey; before-the-bell earnings from FedEx, General Mills; after-the-bell earnings from Oracle, Accenture, Research In Motion, and Take-Two.
FRIDAY: Leading indicators, quadruple witching.
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