Stocks Claw Out Gains

Stocks closed slightly higher Tuesday, after hugging the flat line for much of the day and taking a breather after Monday's rally. Gregg Greenberg has The Real Story.
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(Updated with closing stock prices.)

NEW YORK (

TheStreet

) -- Stocks loafed after Monday's rally, but still ended slightly in the green with some help from much better than expected pending home sales data and a gentle, final push of late-afternoon buying.

The

Dow Jones Industrial Average

rose 33.63 points, or 0.4%, to 9320.19, and the

S&P 500

advanced 3.02 points, or 0.3%, to 1005.65. The

Nasdaq Composite

tacked on 2.7 points, or 0.1%, to 2011.31.

Industrials and financials held up, with

Caterpillar

(CAT) - Get Report

rising 6.1% to lead the Dow after reaffirming full-year guidance.

The S&P 500 on Monday topped 1000 for the first time since November 2008, after better-than-expected data on U.S. manufacturing and a surprise increase in construction spending. But "it's been time for a pause for a while based on the technical conditions of the market," says Paul Nolte, director of investments, at Hinsdale Associates, "we are certainly overbought.

"Investors I think are very heartened, or have been at least, over the earnings numbers and some of the economic data that are pointing to maybe the worst of the recession at least being over and the possibility of economic growth in a near future," says Nolte. "So they've been bidding up stocks for much of July -- and it is time to take a breather. Whether they will or not is obviously another story."

Click below to hear my entire conversation with Nolte, in which he discusses earnings, economic data, and how to play a market pause.

Helping stocks resist a pullback, the National Association of Realtors said the pending home sales index rose by 3.6%, which was well above expectations. It was the fifth consecutive month of gains, which hasn't happened since July 2003.

"Historically low mortgage interest rates, affordable home prices and large selection are encouraging buyers who've been on the sidelines," said Lawrence Yun, NAR chief economist. Yun added that first-time buyers who want to take advantage of the $8,000 tax credit must act soon in order to meet the Nov. 30 deadline to close sales.

Housing stocks got a boost from those data, with

Hovnanian Enterprises

(HOV) - Get Report

gaining 11.4%,

DR Horton

(DHI) - Get Report

rising 4.9% and

Lennar

(LEN) - Get Report

,

Toll Brothers

(TOL) - Get Report

and

KB Home

(KBH) - Get Report

adding almost 3% each.

Wall Street also got a few clues to the health of the consumer in a report on personal income and spending. Income fell 1.3% in June, unchanged from the month prior but slightly more than the 1% decline expected. At the same time spending rose 0.4%, after a 0.1% rise the month prior, slightly better than the anticipated 0.3% increase.

Meanwhile,

UBS

(UBS) - Get Report

, Switzerland's largest bank by assets, reported its third-straight quarterly loss, and CEO Oswald Gruebel cautioned that further withdrawals by wealthy clients are still to come. That news helped to pressure stocks before the open, and ultimately sent UBS shares down 7.6% to $14.29.

Luxury automaker

BMW

also reported that its second-quarter profit plummeted 76% as consumers veered away from expensive cars. The carmaker refrained from providing a forecast for the rest of the year, due to volatile markets and "uncertainty with regard to future developments." CEO Norbert Reithofer said that despite "some tentative positive signals, a lasting and wide-ranging recovery is not yet in sight."

Toyota Motor

(TM) - Get Report

, on the other hand, reported a narrower-than-expected loss and improved its outlook for the full year, expecting government incentives to help boost sales in Japan.

On Monday U.S. automaker

Ford

(F) - Get Report

reported logging its first year-over-year increase in sales since November 2007, with a significant boost from the government's "Cash for Clunkers" program.

Toyota shares were down 0.6%, at $86.66, while Ford edged down 0.4%, to $8.30 on Tuesday.

As for commodities, oil retreated 16 cents to $71.42 a barrel, while gold increased $10.90 to $969.70 an ounce. The dollar was recently stronger vs. the yen, but losing ground vs. the pound and euro.

Oil stocks underperformed, with the Philadelphia Oil Service Sector index losing 1.7%.

Stocks abroad were mixed. In Europe, Frankfurt's DAX and London's FTSE 100 were down 0.2% each. In Asia, Hong Kong's Hang Seng edged down 0.05%, while Japan's Nikkei added 0.22%.

Longer-dated Treasuries were falling in price, rising in yield. The 10-year was down 12/32 to yield 3.7%, while the 30-year lost 1-02/32, yielding 4.47%.

-- Written by Elizabeth Trotta in New York

.