U.S. stocks climbed on Tuesday, with the Nasdaq Composite furthering gains that have it at a 14-year high, as economic reports offered a benign view on inflation and cast a better-than-anticipated light on the housing market.
"We're starting to see less of a focus on geopolitical events and more of a focus on earnings and the underlying health of the economy, which is clear from the housing data for July," said Jeff Greenberg, senior economist at J.P. Mogan Private Bank.
Already higher before the July data, stock-index futures furthered their advance after the government's consumer price index increased 0.1 percent in July, in line with expectations and indicating the cost of living remains muted even as the economy improves.
Read MoreConsumer prices post slim gain; food costs offset by energy
Separately, the Commerce Department report beginning home construction rose 15.7 percent last month from June, while starts for volatile multi-family homes jumped 33 percent.
Read MoreHousing starts, permits rise in July
"Today's data is solid for Fed activity. The housing market's recent weakness appears to be reversing while the labor market appears to be improving. And all of this comes with only modestly building inflationary pressures," emailed Dan Greenhaus, chief strategist at BTIG.
"We think the Fed will find these data further supportive of the 'go-it-slow' approach to exiting its accommodative policies," Greenhaus added.
Apple hit $100 a share for the first time since its seven-for-one split in June. Home Depot gained after the home-improvement retailer reported earnings that beat expectations and hiked its outlook. TJX Companies also advanced after the parent company of stores including T.J. Maxx and Marshalls raised its 2014 earnings forecast.
Major U.S. Indexes
After a 90-point jump, the Dow Jones Industrial Average gained 80.85 points, or 0.5 percent, to 16,919.59, with Home Depot leading blue-chip gains that included 21 of 30 components.
The rose 9.86 points, or 0.5 percent, to 1,981.60, with utilities the best performing and telecommunications the sole sector of 10 in the red.
The Nasdaq extended gains into a fifth session, up 19.20 points, or 0.4 percent, at 4,527.51.
The CBOE Volatility Index, a gauge of investor uncertainty, fell 0.9 percent to 12.21.
For every share falling, nearly two gained on the New York Stock Exchange, where nearly 556 million shares exchanged hands. Composite volume cleared 2.6 billion.
Treasury prices turned lower, with the yield on the 10-year Treasury note used to figure mortgages and other consumer loans rising a basis point to 2.4 percent.
The dollar gained against the currencies of major U.S. trading partners and the price of dollar-denominated commodities including oil and gold turned lower.
On the New York Mercantile Exchange, crude futures for September delivery dropped $1.93 cents to $94.48 a barrel, a seven-month low; gold futures for December delivery declined $2.60 to $1,296.70 an ounce.
On Monday,stocks rallied and the Nasdaq rose to its highest level since March 2000 and the price of oil fell to its lowest in more than a year on easing geopolitical tensions.
Read MoreNasdaq ends at 14-year high as global worries abate
—By CNBC's Kate Gibson
Coming Up This Week:
Wednesday
Earnings: Hewlett-Packard, Lowe's, Target, Staples, EatonVance, JA Solar, Hain Celestial, PetSmart, JM Smucker, L Brands
7:00 a.m.: Mortgage applications
2:00 p.m.: FOMC minutes
Thursday
Earnings: Gap, Intuit, The Buckle, Dollar Tree, HormelFoods,Salesforce.com, Gamestop, Ross Stores, Brocade, Aeropostale, Royal Ahold, Mentor Graphics
8:30 a.m.: Jobless claims
10:00 a.m.: Existing home sales
10:00 a.m.: Philadelphia Fed survey
10:00 a.m.: Leading economic indicators
1:00 p.m.: $16 billion 5-year TIPs auction
Friday
Earnings: Ann, Foot Locker, Royal Bank of Canada
10:00 am Fed Chair Janet Yellen at Jackson Hole
2:30 pm European Central Bank President Mario Draghi
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