The S&P 500 eked out gains on Tuesday, boosted by technology sector, but losses in consumer discretionary shares including Home Depot and Discovery kept the Dow Industrials and the Nasdaq in check.
Rising risks and recent soft data should not prevent solid growth for the economy this year, but the Federal Reserve will remain "patient" in deciding on further interest rate hikes, Chairman Jerome Powell said in prepared testimony ahead of a hearing before the US Senate Banking Committee.
"He is saying sort of what we have been reading: conflicting signals. If you have a positive consumer you should have a positive economy and that may be reinforced by the confidence number that assuaged a lot of investor concerns," said Jack Ablin, chief investment officer at Cresset Capital Management in Chicago.
But economic data was mixed on Tuesday. While the Conference Board's consumer confidence index rose more than expected in February, the Commerce Department said US homebuilding tumbled to a more than two-year low in December.
The housing slowdown impacted Home Depot Inc's fourth-quarter sales, which missed Wall Street forecasts. The home improvement retailer's shares fell 2 percent, dragging the S&P 500 consumer discretionary index down 0.21 percent.
"The consumer confidence numbers are going to take precedence over homebuilders because it is more recent data. Also, consumer confidence affects a broader swath of the economy," said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance in Charlotte, North Carolina.
Six of the 11 major S&P sectors were higher. While consumer discretionary stocks weighed the most, boosting the markets were technology and financial indexes with gains of about 0.33 percent.
Microsoft Corp rose 1.2 percent and was the biggest boost to the three indexes. Among the drags was Caterpillar Inc, which fell 2.9 percent after brokerage UBS double downgraded the stock.
At 11:57 a.m. ET the Dow Jones Industrial Average was up 3.39 points, or 0.01 percent, at 26,095.34, the S&P 500 was up 2.83 points, or 0.10 percent, at 2,798.94 and the Nasdaq Composite was up 0.21 points, or 0.00 percent, at 7,554.67.
US stocks have been bolstered in recent weeks by trade optimism and dovish signals from the Fed, with the benchmark S&P 500 index about 4.7 percent away from its record closing high in September.
Healthcare stocks were down 0.16 percent as a US Senate hearing on drug-price, where top executives from some of the largest drug companies are expected to get grilled on the high cost of prescription drugs, progressed.
AutoZone Inc climbed 5.1 percent after the auto parts retailer posted better-than-expected quarterly same-store sales.
Discovery Inc fell 7.3 percent after the Animal Planet owner missed quarterly profit expectations on significant decrease in revenue from its education business.
Advancing issues outnumbered decliners by a 1.02-to-1 ratio on the NYSE, while declining issues outnumbered advancers for a 1.24-to-1 ratio on the Nasdaq.The S&P index recorded 12 new 52-week highs and one new low, while the Nasdaq recorded 31 new highs and 12 new lows.