After straddling the unchanged line throughout the day, the markets closed slightly higher on Tuesday as the bulls resisted early selling pressure amid the latest glimmer of hope for the housing market. 

Today’s Markets

The Dow Jones Industrial Average rose 33.63 points, or 0.36%, to 9320.19, the Standard & Poor's 500 gained 3.02 points, or 0.30%, to 1005.65 and the Nasdaq Composite picked up 2.70 points, or 0.13%, to 2011.31. The consumer-friendly FOX 50 added 2.19 points, or 0.30%, to 734.06.

The markets initially appeared on track for a rare pullback but stocks climbed out of the red after an industry group said pending home sales unexpectedly rose sharply in June. Tuesday's mini rally left the Dow and S&P 500 in the green for the fourth-straight session and at their highest closes since Nov. 4. 

“People are really looking at opportunities to buy on pullbacks. I think we’ve got a mentality now where people want to increase their risk exposure by buying equities,” said Craig Peckham, equity trading strategist at Jefferies & Co.

The bulls managed to maintain and add onto what has been a historic rally from the March lows. Last month the Dow enjoyed its strongest July in two decades and the S&P 500 on Monday closed above the 1000 threshold -- recouping 50% of its plunge to 666 in March. 

“I do think it’s overdone. We’re definitely due for a pause,” said Michael James, senior equity trader at Wedbush Morgan Securities. “I just think it’s getting a little stretched.”

Caterpillar (CAT) and Traveler's (TRV) were the biggest percentage winners on the Dow on Tuesday, easily offsetting slight losses from defensive stocks like Merck (MRK) and Verizon (VZ). 

The markets climbed out of the red Tuesday when the National Association of Realtors said pending home sales rose 3.6% in June, marking the fifth consecutive monthly increase. The industry group said it’s the first five-month increase in activity since July 2003. Economists had expected a more modest 0.7% increase. Shares of home builders like Lennar (LEN) and KB Home (KBH) closed higher on the data.

The markets received a mixed batch of corporate earnings on Tuesday as Toyota Motor (TM) and CVS Caremark (CVS) beat the Street but agricultural giant Archer Daniels Midland (ADM) widely missed estimates. 

Meanwhile, crude oil took a step backward a day after the commodity nearly set a new 2009 closing high. Crude settled at $71.42 a barrel, down 16 cents, or 0.22%.

Wall Street could be in store for a bumpy ride later this week as a slew of retailers are scheduled to report same-store sales and the government's highly-anticipated jobs report is due on Friday. 

“I think there’s more bad news to come. You are going to see a jobless number on Friday that’s going to spin their heads," said Joe Saluzzi, co-head of trading at Themis Trading. “I’ve missed the rally but I’m kind of happy. I’ll wait it out. I still don’t think it’s real. But that doesn’t mean it’s going to stop.”

Data Dump

The Commerce Department said personal income in June tumbled by 1.3% -- the steepest decline since January 2005. Economists had expected a more modest decline of 1%. On the other hand, the government said consumer spending increased by 0.4%, topping expectations. And the data showed the savings rate fell to 4.6% last month after spiking to a 14-year high of 6.2% in May.

Corporate Movers

PepsiCo (PEP) agreed to purchase its two largest bottlers -- Pepsi Bottling (PBG) and PepsiAmericas (PAS) -- for a combined $7.8 billion. Pepsi upped its offer to $28.50 a share in cash and stock for Pepsi Americas and will pay $36.50 a share for Pepsi Bottling.

Archer Daniels Midland (ADM) said its quarterly net income plunged more than 80% as the company posted losses in its ethanol and agricultural services businesses. ADM earned 10 cents a share, well shy of the 45 cents analysts had expected. However, ADM’s revenue fell by a better-than-expected 24% to $16.53 billion.

General Electric (GE) agreed to pay $50 million to settle charges filed by the SEC that some of the conglomerate’s accounting practices in 2002 and 2003 were fraudulent. GE neither admitted nor denied any wrongdoing.

Toyota Motor (TM) disclosed another quarter of red ink but the Japanese auto maker trimmed its loss forecast for the full year. In its most recent quarter, Toyota posted an operating loss of $2.04 billion, beating estimates from analysts polled by Thomson Reuters.

Goldman Sachs (GS) CEO Lloyd Blankfein told employees to avoid big-ticket or flashy purchases, in light of increasing criticism pointed at the Wall Street bank, the New York Post reported Tuesday. 

CVS Caremark (CVS) weighed in with a 15% increase in net income and an upbeat outlook. CVS posted an adjusted-profit of 65 cents a share for the second quarter, beating Wall Street’s estimates by a penny. The company’s revenue climbed 17.6% to $24.9 billion, matching expectations.

Pulte Homes (PHM) and Centex (CTX) failed to join the home builder rally after the companies posted mixed results late Monday. Pulte, which agreed to buy Centex for $1.4 billion, widened its second-quarter loss to 74 cents per share, missing the Street’s estimates by 12 cents. Centex posted a quarterly profit of 68 cents per share, thanks in part to a tax benefit of $410 million.

Duke Energy (DUK) reported a 21% decline in quarterly net income, however the energy company’s non-GAAP EPS of 26 cents beat the Street by a penny. Duke’s revenue missed estimates, sinking 9.7% to $2.91 billion.

Marvel Entertainment (MVL) reported a better-than-expected quarterly profit of 37 cents a share and raised the lower end of its full-year earnings and sales guidance.

Cognizant Technology Solutions (CTSH) soared more than 10% to 52-week highs after the IT service provider beat the Street and upgraded its full-year guidance above analysts’ view. Cognizant’s non-GAAP EPS of 47 cents exceeded analysts’ expectations by 10 cents.

Allegheny Energy (AYE) suffered a 53% decline in net income in the second quarter and posted weaker-than-expected non-GAAP income and revenue.

Global Markets

European markets also cooled off as London's FTSE 100 tumbled 0.24% to 4671.37, France's CAC 40 slipped 0.04% to 3476.37 and Germany's DAX fell 0.18% to 5417.02. 

In Asia, Tokyo's Nikkei 225 gained 0.22% to 10375.01, Hong Kong's Hang Seng was unchanged at 20796.43 and China's Shanghai Composite rose 0.26% to 3471.44.