U.S. stocks closed modestly higher Tuesday, but Apple, J.C. Penney, and airline stocks were the big stories of the day.
In U.S. economic news, investors tuned to comments from Atlanta Federal Reserve (Fed) President Dennis Lockhart, who stressed that the central bank's decision to scale back its $85 billion per month bond purchase program will depend on economic data. Lockhart said he does not expect to have enough data by September to be sure of his outlook, but added that whenever the Fed makes a decision, it "ought to be thought of as a cautious first step." Retail sales edged up 0.2 percent in July, rising for a fourth straight month, but the gain was smaller than expected.
In corporate news, Apple shares were the second best performing in the S&P 500 after activist investor Carl Icahn took to Twitter to announce that he has a "large position" in the company and believes it to be "extremely undervalued." J.C. Penney was in the spotlight after Bill Ackman resigned from the retailer's board. Ackman has been demanding the ouster of Chief executive Myron Ullman and chairman Thomas Engibous. Shares of J.C. Penney initially rose on the news but quickly fell into the red. Airline stocks were big losers after the Justice Department filed a lawsuit to block the $11 billion merger between American Airlines and U.S. Airways, arguing that it would lead to higher fares for consumers. Shares of American Airline's bankrupt parent company AMR plunged more than 45 percent while U.S. Airways shares also tumbled.
The dollar gained ground against the euro and the yen, but lost ground versus the pound. Light sweet crude oil for September delivery rose 72 cents to $106.83 a barrel on the New York Mercantile Exchange. Gold futures dropped $13.70 to $1,320.50 an ounce.
The Dow Jones industrial average climbed 31.33, or 0.20 percent, to 15,451.01. The broader Standard & Poor's 500 index gained 4.69, or 0.28 percent, to 1,694.16. The technology-heavy Nasdaq composite index moved up 14.49, or 0.39 percent, to 3,684.44.