The Dow Jones industrial average (^DJI) rose 31 points (0.2 percent) to 15,451, the Standard & Poor's 500 index (^GPSC) climbed 4 points (0.3 percent) to 1,694 and the Nasdaq composite index (^IXIC) gained 14 points (0.4 percent) to close at 3,684.
Atlanta Fed President Dennis Lockhart said recent data don't present a clear picture of the economy, but at the same time, he didn't rule out some decrease next month in the $85 billion monthly pace of bond buys currently underway.
In other economic news, the Commerce Department reported that U.S. retail sales rose in July, pointing to an acceleration in consumer spending that could signal more robust growth through the rest of the year. Retail sales rose 0.2 percent in July. Stripping out the volatile categories of cars, gasoline and building materials, the sales numbers showed an ever better gain -- 0.5 percent, the largest in seven months.
Other data released Tuesday showed that small businesses were more optimistic in July, although companies rebuilt inventories in June at an unexpectedly weaker pace.
Shares of J.C. Penney (JCP) fell almost 4 percent to $12.68 after the company announced Bill Ackman had quit the company's board of directors, as part of a deal to resolve an unusually public battle between the activist investor and the struggling department store operator.
The Justice Department filed a lawsuit in federal court in Washington to block the merger of US Airways and American Airlines, saying the combination would cause "substantial harm" to consumers by leading to higher fares and fees. The airlines said the government's conclusions were wrong, and they vowed to use "all legal options" to fight back.
US Airways (LCC) stock fell 13.2 percent to $16.34. Other airlines lost ground, too. Delta Air Lines (DAL) dropped 7 percent to $19.55, while United Continental Holdings (UAL) dropped 7.4 percent to $30.74.
More Stocks in the News:
- Shares of Jos. A. Bank Clothiers (JOSB) jumped more than 12 percent to $45.35 after BeaconLight Capital said the men's clothing chain's stock is undervalued and publicly urged for changes at the company.
- Yum Brands (YUM), which owns the Taco Bell, Pizza Hut and KFC fast-food chains surrendered 2 percent to $72.95, after reporting sales in China fell 13 percent in July.
- Eli Lilly & Co. (LLY) rose 2.6 percent to $54.94 after the company said its potential lung cancer treatment necitumumab had met a key research goal by helping to increase survival time for patients in a late-stage study.
- PulteGroup (PHM) fell 2.3 percent, to $15.37, leading a broad decline in homebuilder stocks.
- The Labor Department releases its Producer Price Index for July at 8:30 a.m. Eastern time.
- The Energy Information Administration releases its weekly report on petroleum stockpiles.