Retail stocks were among the biggest winners Tuesday. Abercrombie & Fitch(ANF), JCPenney(JCP), Guess(GES), and Macy's(M) rose more than 2%.
"Once again, the U.S. consumer showed amazing resiliency even with major concerns over consumer confidence and holiday sales," said Ryan Detrick, senior technical strategist at Schaeffer's Investment Research.
Still, other economic indicators were mixed. The index measuring manufacturing activity in New York state was negative for the sixth straight month in January, according to the New York Federal Reserve Bank. Business inventories for November increased 0.3% slightly more than analysts had forecast, according to data released by the Census Bureau.
For the most part, investors remain unwilling to place any big bets until they get more clarity about Corporate America's profits.
Shares of Facebook(FB) dropped nearly 3% following the company's announcement that it plans to add a search feature to the social network. Shares of Yelp(YELP), a site that offers user-generated reviews of businesses and restaurants, dropped sharply after Facebook's announcement. The Facebook news didn't appear to affect shares of Google Inc(GOOG).
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Overseas, European markets closed in mixed territory, with the CAC-40 and DAX slightly weaker. Germany's economy grew by just 0.7% in 2012, down from 3% the previous year, the government said Tuesday.