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Car sales should show economic engine running

November car sales should be robust, confirming the trend of an improving economy and a consumer that is willing to spend.

Vehicle sales for November are expected to come in at an annualized selling pace of 16.7 to 17 million, above the current full year rate of 16.5 million.

Read MoreBlack Friday car sales explode

That comes in the face of spotty economic data from last week that missed the mark and the National Retail Federation's disappointing report that Black Friday weekend sales fell 11 percent.

"(Stocks) started off trading on the retail report that looked kind of funky," said Mark Luschini, chief investment strategist at Janney Montgomery. He said the report likely reflected a shopping pattern that includes more online shopping and holiday spending over a longer period of time.

He said the fact that the ISM manufacturing report Monday was nearly flat with last month was a positive. It fell slightly to 58.7 from a 3-1/2 year high of 59 in October.

Chrysler Jeep automotive retail
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But inside that number, new orders rose to the highest level since August and export growth increased - positive signs for the economy.

Luschini said the market has been worrying that the U.S. economy was sliding with overseas economies, after a string of disappointing data last week. Personal spending and durable goods were both weaker than expected last Wednesday.

Bond yields moved slightly higher Monday with bond prices dropping for the first time in seven sessions, in part because of the stronger ISM report compared to weaker manufacturing data from Europe and China.

Traders said the market also responded slightly to comments from New York Fed President William Dudley that the Fed could begin to raise rates starting in the middle of next year.

The S&P 500 was down 14 at 2053, but oil rebounded more than 4 percent to $69 barrel after U.S. crude skidded 10 percent Friday. Gold also recovered from an overnight sell off, finishing up more than 3.5 percent .

Read MoreGold above $1,200 with wind at its back for now

Traders will be watching more Fed speak Tuesday, with Fed Gov. Lael Brainard speaking at noon EST on economic growth and other matters.

What Else to Watch Tuesday

Earnings: Bank of Montreal, Bob Evans

Monthly car sales

8:30 am Fed Chair Janet Yellen greets students at Fed

10:00 a.m.: Construction spending

12:00 p.m.: Fed Gov. Lael Brainard speaks on Economic Growth and Regulatory Paperwork Reduction Act Outreach Meeting in Los Angeles