* U.S. airlines suspend flights to Israel
* Inflation data keeps Fed on pace
* Indexes up: Dow 0.4 pct, S&P 0.55 pct, Nasdaq 0.75 pct (Updates prices, changes comment, adds S&P 500 at record)
By Rodrigo Campos
NEW YORK, July 22 The S&P 500 hit a record high on Tuesday as inflation data was seen keeping the Federal Reserve in an equities-friendly tone, while hopes rose for an easing of tensions in Ukraine.
Mixed earnings have been pouring in since Monday's closing bell, allowing the positive bent to continue. U.S. consumer prices rose in June as the cost of gasoline surged, but the overall trend pointed to a slow build-up of inflation pressures -allowing the Fed to continue to gradually take the foot off the stimulus pedal.
An index of homebuilder stocks rose 1.1 percent after separate data showed U.S. home resales rose in June at their fastest pace in eight months.
"It seems the market for today is taking a breather from worrying about the geopolitical concerns," said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.
"The market is focusing on several good earnings reports and of course economic data."
The Dow Jones industrial average rose 68.61 points or 0.4 percent, to 17,120.34, the S&P 500 gained 10.8 points or 0.55 percent, to 1,984.43 and the Nasdaq Composite added 33.13 points or 0.75 percent, to 4,457.84.
The S&P hit an intraday record high of 1,986.24.
Pro-Russian rebels agreed to hand over the black boxes from the Malaysian plane shot down last week near the Ukraine-Russia border and the Malaysian government negotiated the release of the remains of nearly 300 victims.
The European Union threatened Russia with harsher sanctions over Ukraine, but France's president signaled the disputed delivery of a warship to Moscow would go ahead.
Traders are also keeping an eye on the Middle East as Israel pounded targets across the Gaza Strip and said no ceasefire was near. Top U.S. and U.N. diplomats pursued talks to stop fighting that has claimed more than 600 lives, an overwhelming majority from inside Gaza.
U.S. air carriers Delta, American Airlines and United have halted flights to Israel to ensure passenger safety as the turmoil in the region has intensified. An airline stocks index was up 0.6 percent, roughly in line with the S&P 500.
Verizon's shares edged 0.5 percent higher after its revenue topped estimates and Chipotle Mexican Grill jumped 12.3 percent to $662.64 a day after it reported a nearly 26 percent jump in quarterly profit.
United Technologies gave a rosy outlook but shares fell 2 percent to $110.73 and Coca-Cola dropped 3 percent to $41.11 after its sales missed estimates, weighed by stalling growth in North America.
Travelers dropped 4.2 percent to $91.27 after hail and wind storms in the United States increased catastrophe losses.
Billionaire investor William Ackman's latest volley of accusations against Herbalife fell flat on Wall Street, with shares in the nutrition company soaring 15.6 percent to $62.47.
(Reporting by Rodrigo Campos; additional reporting by Chuck Mikolajczak; Editing by Nick Zieminski)