Stocks Drift to Higher Close on Thin Volume

Stocks drifted higher Tuesday, helped by signs that Italy is closer to a new government, along with improvements in U.S. economic data.

Trading volumes were light and stocks slipped from session highs minutes before the close. Some 3.5 billion shares changed hands on the New York Stock Exchange and only 1.7 billion shares traded on the Nasdaq.The Dow Jones Industrial Average tacked on 17 points, or 0.1%, at 12,096 after trading within a range of 162 points. The S&P 500 added 6 points, or 0.5%, at 1258, and the Nasdaq finished up 29 points, or 1.1%, at 2686. Stocks gained momentum to the upside after news that Italy's pending leader Mario Monti will meet with Italian President Giorgio Napolitano on Wednesday. Monti is expected to form a bipartisan government, bringing the country one step closer to adopting austerity measures in an attempt to fend off the debt crisis.A slew of U.S. economic reports from the morning helped prop up markets throughout the day. The Commerce Department said October retail sales rose 0.5%, beating the 0.4% increase economists had forecast but slowing from September's 1.1% gain. Sales not including cars rose 0.6%, also beating expectations, after a 0.5% increase in the prior month.The Labor Department's producer price index fell 0.3% in October. Economists surveyed by Thomson Reuters were expecting a 0.1% fall compared with a 0.8% rise in September. Excluding food and energy items, the index was unchanged, compared with a 0.2% increase in the previous month.The Commerce Department reported that business inventories were basically unchanged from August. Economists polled by Reuters expect a rise of 0.1%, compared with an increase of 0.5% the previous month.Business conditions in the New York region improved more than expected, according to the New York Federal Reserve's Empire State Manufacturing Survey for November, which turned to a positive reading of 0.6 after economists expected a negative reading of -2.10."Although in the bigger picture the market is still hostage to ongoing developments in Europe, the bounce off this morning's low is based on better than expected data, particularly the retail sales report for October," said Lou Brien, a market strategist at DRW Trading. "But as has been the case recently, it appears that volume is light so far on the trading day and the market remains vulnerable to the next headline from Europe; but of course that is a sword that cuts both ways."Rising borrowing costs among eurozone nations capped the day's gains. Earlier, Italian 10-year bond yields once again pierced the 7% threshold, suggesting investors had doubts over new Italian leader Mario Monti's ability to improve the country's fiscal outlook even as worked to assemble a new government. Even more troubling, borrowing costs rose in Spain and France. An auction of Spanish bonds failed to reach its goal as yields approached a euro-era high. The auction of 12-month debt averaged a yield of 5.022%. French 10-year bond yields spiked to a record high spread over German bonds amid fears that the eurozone's second largest economy will lose its coveted triple A credit rating."Now that leaders in Greece and Italy have resigned and the countries are working to implement austerity measures, profit taking is setting in as investors reflect on the remaining obstacles ahead," said James "Rev Shark" DePorre, founder and CEO of Shark Asset Management, and a contributor to TheStreet."There is plenty to do if Europe is really going to be saved, as we have celebrated so many times recently."Overnight, Hong Kong's Hang Seng fell 0.8% while Japan's Nikkei slipped 0.7%. The FTSE in London closed flat, and the DAX in Frankfurt finished down 0.9%. In corporate news, retailer Home Depot(HD) slipped 0.5%. The company reported a third-quarter net income rise of 12% to $934 million, or 60 cents a share, compared with $834 million, or 51 cents per share, in the year-ago period. Analysts surveyed by Thomson Reuters expected earnings of 59 cents a share on revenue of $17.11 billion.Wal-Mart(WMT) lost 2.4% after missing Wall Street expectations. The company posted earnings from continuing operations of 97 cents a share on revenue of $109.5 billion when forecast called for a profit of 98 cents on revenue of $108 billion.Dell(DELL) added 2%. The company, which reports results after the bell, expected to post a profit of 47 cents a share on revenue of $15.66 billion for the third quarter. Analysts are also looking for information on how the PC maker has been affected by shortages of hard-disk drives because of heavy flooding in Thailand.Staples(SPLS) lost 3.6% after the company lowered guidance for the year. Its revenue of $6.57 billion was up from $6.54 billion a year ago but short of the analyst consensus for $6.71 billion.TJX(TJX) edged up 0.5% after its earnings results came in line with consensus. Sales for the third quarter increased 5% to $5.8 billion, net income for the third quarter totaled $406 million and earnings per share were at $1.06, up 15% from last year.The December crude oil contract settled up $1.23 at $99.37 a barrel. Gold for December delivery gained $3.80 at $1782.20.The benchmark 10-year Treasury was trading about flat with the yield at 2.057%. The dollar strengthened against a basket of currencies with the dollar index up by 0.49%.. >To order reprints of this article, click here: Reprints