Stocks Fight Their Way Back to Mixed Close

Updated from 4:12 p.m. EDT

Stocks edged higher in the final hour of trading Tuesday to close roughly where they opened the choppy trading session -- narrowly mixed. Traders digested home-sales data that were as bad as expected, improved consumer confidence reports and hawkish notes from an August Fed meeting.

The Dow Jones Industrial Average gained 26.62 points, or 0.2%, at 11,412.87, and the S&P 500 added 4.67 points, or 0.4%, to 1,271.51. The Nasdaq shed 3.62 points, or 0.2%, at 2,361.97.

Recent angst over U.S. financial institutions persisted Tuesday. The Wall Street Journal reported that federal regulators have sent "memorandums of understanding," documents that can force banks to raise capital or reduce exposure to high-risk assets, to as many as six banks, including National City (NCC Quote), Imperial Capital (IMP Quote), First State (FSNM Quote) and BankUnited Financial (BKUNA Quote).

The memorandums represent efforts by the Federal Reserve and the Office of the Comptroller of the Currency to head off failures, the report said. Nine banks have failed this year, and five of those have gone under since mid-July. The most recent casualty occurred last week, when a Kansas bank was shut down.

Further illustrating unease over U.S. banks was the release of the Federal Deposit Insurance Corp.'s second-quarter list of so-called problem banks. The number of banks on the list increased to 117 from 90 in the first quarter, and assets controlled by troubled banks increased to $77 billion from $26 billion. IndyMac, which was seized by regulators on July 11, accounted for $32 billion of those assets.