The Dow Jones industrial average closed up 35 points, or 0.2 percent, at 15,529. The Standard & Poor's 500 index rose 7 points, or 0.4 percent, to 1,704 -- just 5 points shy of its record high reached on Aug. 2. The Nasdaq composite was up 27 points, or 0.4 percent, to 3,745. Benchmark U.S. crude oil fell $1.17, or 1.1 percent, to close at $105.42 a barrel on the NYMEX, after dipping $1.62 on Monday.
The Labor Department reported on Tuesday that U.S consumer prices barely rose in August -- another sign that slow economic growth is keeping inflation low.
Rising tech stocks included the video game company Electronic Arts (EA), which is getting a solid start with this year's version of its Madden football franchise. Electronic Arts rose 64 cents, or 2.4 percent, to $27.60.
Internet radio giant Pandora Media (P) saw its stock rebound by 5 percent to $25.19, a day after it announced a plan to sell a large amount of new shares.
Computer memory maker Micron Technology (MU) rose 40 cents, or 2.4 percent, to $16.84 as investors bet that memory prices will rise after a fire shut down a competitor's factory in China.
A few companies benefited from large investments.
Aeropostale (ARO) jumped $1.55, or 18 percent, to $10.16 after Sycamore Partners disclosed an 8 percent stake in the teen retailer. And Huntsman (HUN), a chemical maker, rose 36 cents, or 2 percent, to $19.50 after saying it will pay $1.1 billion for two businesses from Rockwood Holdings (ROC), which rose 61 cents, or 0.9 percent, to $67.22.
Other companies making big moves included:
- Abercrombie & Fitch (ANF) rode Aeropostale's coattails, moving up $1.10, or 3 percent, to $38.44.
- Microsoft (MSFT) said Tuesday that it would boost its quarterly dividend by 5 cents a share to 28 cents, and launch a new $40 billion stock buyback program. Microsoft shares rose 11 cents to $39.92.
- Boeing (BA) rose $1.45, or 1.3 percent, to $117.12 as a stretched version of its new 787 flew for the first time. Boeing's gain was responsible for one-third of the Dow's rise.
- Outerwall (OUTR), which owns the Redbox DVD kiosks, plunged $6.48, or 11.6 percent, to $49.49 after slashing its outlook because of weaker-than-expected demand for discs.
- The Commerce Department will release housing starts for August at 8:30 a.m.
- The Federal Open Market Committee meets to set interest rates.
- The European Commission will present draft legislation designed to prevent further manipulation of LIBOR and other financial benchmarks.
- FedEx (FDX) reports quarterly earnings before the market opens.
- Oracle (ORCL) reports quarterly earnings after the market closes.