US STOCKS-Wall St rises, Dow and S&P 500 set intraday records

Tue Aug 26, 2014 12:04pm EDT

* U.S. consumer confidence hits highest since October 2007

* Best Buy tumbles after results, DSW rises

* Digital Ally gains further, has tripled this month

* Indexes up: Dow 0.4 pct, S&P 0.3 pct, Nasdaq 0.3 pct (Updates to midday trading)

By Ryan Vlastelica

NEW YORK, Aug 26 (Reuters) - U.S. stocks rose on Tuesday, with both the Dow and S&P 500 hitting fresh intraday records on the back of strong consumer data suggesting the market's long-running rally could continue.

The day's gains were broad, with only the telecom and utility sectors lower on the day. Both groups are viewed as defensive plays that underperform in periods of economic expansion. Energy shares, which are highly correlated to the pace of growth, led the day's gain with a 0.8 percent advance.

The S&P climbed back above 2,000, which it had breached for the first time on Monday. With Tuesday's move, both the Dow and the S&P have risen in 10 of the past 13 sessions, while the Nasdaq is up for 11 of the past 13 sessions. However, much of the market's recent gains have come on low volume, suggesting many traders may be reluctant to jump in at current levels.

"It's hard to read too much into today's activity, since volume is so low. People aren't going to do anything too aggressive until there's some kind of catalyst, either positive or negative," said Michael O'Rourke, chief market strategist at JonesTrading in Greenwich, Connecticut. "We're still in an uptrend, but it will be tough to move significantly higher from here."

U.S. consumer confidence rose more than expected in August, climbing to its highest since October 2007. Separately, U.S. durable goods orders jumped 22.6 percent in July, the biggest gain on record, though the number was skewed by strong international demand for aircraft. Excluding transportation, orders fell 0.8 percent.

The market's momentum is still seen as intact and the S&P's price-to-earnings ratio is within historical norms, leading many analysts to believe stocks are not overvalued. Nonetheless, pronounced further gains may be a challenge amid potential headwinds such as a reduction in Federal Reserve stimulus and a simmering conflict between Ukraine and Russia.

The Dow Jones industrial average rose 66.4 points or 0.39 percent, to 17,143.27, the S&P 500 gained 6.1 points or 0.31 percent, to 2,004.02 and the Nasdaq Composite added 15.00 points or 0.33 percent, to 4,572.35.

Best Buy Co Inc fell 5.1 percent to $30.35 after the electronics retailer reported second-quarter revenue that missed expectations and forecast a drop in same-store sales in the second half of the year. DSW Inc rose 8.5 percent to $30.79 after adjusted earnings topped forecasts.

Digital Ally Inc extended its meteoric rise, climbing 17 percent to $14.62 on heavy volume. The recent fatal police shooting of an unarmed black teenager in Missouri has fueled interest in the company's wearable camera, and the stock has almost quadrupled this month alone.

Amazon.com Inc late Monday agreed to buy live-streaming gaming network Twitch Interactive for about $970 million in cash. Shares rose 2.3 percent to $341.84. (Editing by James Dalgleish)

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