* U.S. consumer confidence hits highest since October 2007
* Best Buy tumbles after results, DSW rises
* Digital Ally gains further, up over 250 pct in August
* Dow up 0.3 pct; S&P 500 up 0.2 pct; Nasdaq up 0.3 pct
(Updates to early afternoon, changes byline)
By Chuck Mikolajczak
NEW YORK, Aug 26 U.S. stocks advanced modestly
on Tuesday as both the Dow and S&P 500 backed off after hitting
fresh intraday records on the heels of strong consumer data,
which suggested that the market's long-running rally could keep
Energy shares, which closely track the pace of growth, led
the day's gain. The S&P energy index rose 0.8 percent.
The S&P 500 popped 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 500 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 that many traders may be reluctant to jump in
at current levels.
"From an activity standpoint, it's relatively quiet. We
broke through 2,000 so psychologically now it's going to tease
with that a little bit," said Ken Polcari, director of the NYSE
floor division at O'Neil Securities in New York.
U.S. consumer confidence rose more than expected in August,
climbing to its highest since October 2007, according to the
Conference Board, an industry group. The Commerce Department
reported that 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.
"For the most part the data is starting to come in more
consistently, at least to the positive side, we are not getting
as many hiccups. Although it's slow, it is not necessarily as
fast as people would like but maybe that is a good thing because
there will be more control over it." Polcari said.
The market's trend higher is still seen as intact and the
S&P 500'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 52.63 points or
0.31 percent, to 17,129.50. The S&P 500 gained 4.26
points or 0.21 percent, to 2,002.18. The Nasdaq Composite
added 14.57 points or 0.32 percent, to 4,571.92.
Best Buy Co Inc slid 6.4 percent to $29.95 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. But DSW Inc jumped 8.5 percent
to $30.79 after the shoe and accessory retailer's adjusted
quarterly earnings topped forecasts.
Digital Ally Inc extended its meteoric rise,
climbing another 8.8 percent to $13.61 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's price has nearly quadrupled this month alone.
Amazon.com Inc agreed late Monday to buy
live-streaming gaming network Twitch Interactive for about $970
million in cash. Amazon's stock rose 2.7 percent to $342.98 and
gave the biggest boost to the Nasdaq 100 index.
(Reporting by Chuck Mikolajczak; Editing by Jan Paschal)