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NEW YORK (Reuters) - The S&P 500 and the Nasdaq rose on Tuesday as better-than-expected factory orders and a surge in vehicle sales at Ford Motor Co provided more evidence of an economic recovery.
But a big decline in pending home sales, which fell in November for the first time in nine months, increased concerns about the housing market. That capped the broad market's gains and pushed the Dow industrials into the red a day after all three major U.S. stock indexes rose to their highest levels in over a year.
For the past month, stocks have advanced as investors bet on a series of better-than-expected economic indicators. Much of that optimism appeared to remain intact on Tuesday as S&P indexes for the financial, materials and energy sectors ended the day higher.
Tuesday marked a new 15-month closing high for the S&P 500 and a 16-month closing high for the Nasdaq.
"There is nothing in here to suggest that investors are backing away at all from the sentiment expressed yesterday, which is one of increased optimism about the global recovery," said Craig Peckham, equity trading strategist at Jefferies & Company in New York.
Peckham pointed to what he termed a "slow and measured march higher" in expectations for a better reading in Friday's non-farm payrolls report.
The Dow Jones industrial average fell 11.94 points, or 0.11 percent, to end at 10,572.02. The Standard & Poor's 500 Index rose 3.53 points, or 0.31 percent, to finish at 1,136.52. The Nasdaq Composite Index crept up just 0.29 of a point, or 0.01 percent, to close at 2,308.71.
Ford Motor Co surged 6.6 percent to $10.96, hitting a 4-1/2-year closing high following its report that its December sales shot up 33 percent year-over-year, ending a tumultuous 12 months when rivals GM and Chrysler collapsed into bankruptcy. Earlier in the session, Ford's stock climbed to an intraday high of $11.23.
Earlier Tuesday, the government said U.S. factory orders rose more than expected in November. The report, which suggested the manufacturing sector will continue to support a recovery, was released one day after the Institute for Supply Management's index of manufacturing activity beat estimates.
Financials, energy, materials and consumer discretionary stocks gave the biggest boosts to the S&P 500 in a muted rerun of Monday's rally.
The S&P financial index led the wider market higher, rising 1.7 percent, with Citigroup ending up 3.8 percent at $3.53 on the New York Stock Exchange.
Pending home sales from the National Association of Realtors fell 16 percent in November compared with economists' expectations for a 2 percent drop.
But stocks of most home builders rose, sending the Dow Jones home construction index up 1.8 percent. Some analysts said the home sales numbers may have been skewed due to confusion caused by the government's home tax credit, which was set to expire in November, but it was eventually extended to April.
"I think people are more willing to shake off these November pending home sales numbers and focus more on that factory orders number," said Marc Pado, U.S. market strategist at Cantor Fitzgerald & Co. in San Francisco.
The U.S. dollar edged up 0.15 percent against a basket of major currencies, curbing gains in the materials and energy sectors. The S&P materials index advanced 0.5 percent, while an S&P energy index rose 0.8 percent.
U.S. oil futures rose 0.32 percent, or 26 cents, to settle at $81.77 a barrel, the highest closing price since October 9, 2008. This marked the ninth day of gains for oil futures prices.
The Dow's top performer was Kraft Foods Inc, which gained 4.9 percent to $28.77 after Warren Buffett's Berkshire Hathaway voted "no" on the company's proposal to issue 370 million shares to help finance its proposed purchase of British chocolate candy maker Cadbury Plc.
Volume was light on the New York Stock Exchange, with 1.19 billion shares changing hands, below last year's estimated daily average of 2.18 billion. On the Nasdaq, about 2.39 billion shares traded.
Advancing stocks outnumbered declining ones on the NYSE by a ratio of 3 to 2. On the Nasdaq, the opposite trend prevailed, with five stocks falling for every four that rose.
Reporting by Edward Krudy; Editing by Jan Paschal