Wall Street gains with consumer shares, upbeat auto sales

By Caroline Valetkevitch

(Reuters) - U.S. stocks started December stronger on Tuesday as health and retail shares bounced back and as auto sales suggested upbeat growth in November.

The S&P health care index <.SPXHC> jumped 1.3 percent after declining Monday, while the consumer discretionary index <.SPLRCD> was up 0.9 percent.

U.S. auto sales were on track to post their strongest November ever, according to monthly sales figures released by automakers. Shares of Ford were up 1.3 percent at $14.51, though General Motors' shares were down slightly.

The S&P retail index <.SPXRT> rose 1 percent. Amazon was up 2.1 percent at $678.96.

Katrina Lam, head of investment strategy and research at MV Financial in Bethesda, Maryland, said the focus is on consumer and retail, which have been giving mixed signals to investors.

"Foot traffic in stores was lower. On the other hand more people are shopping online," she said.

Offsetting the upbeat data was a report showing U.S. manufacturing contracted in November for the first time in three years.

The Institute for Supply Management (ISM) said its index of national factory activity fell to 48.6, the first time the index went below 50 since November 2012. A reading below 50 indicates contraction in the manufacturing sector.

At 3:11 p.m., the Dow Jones industrial average rose 121.93 points, or 0.69 percent, to 17,841.85, the S&P 500 gained 16.17 points, or 0.78 percent, to 2,096.58 and the Nasdaq Composite added 37.39 points, or 0.73 percent, to 5,146.06.

Investors are keeping an eye on data for clues regarding the health of the U.S. economy that might spur the Federal Reserve to raise interest rates for the first time in nearly a decade.

The main data this week is the November employment report on Friday, which is expected to show that the economy added 200,000 jobs during the month. Analysts say a strong report virtually guarantees a rate rise this month.

Investors are also awaiting a European Central Bank meeting on Thursday, when the central bank is widely expected to ramp up its trillion-euro bond-buying programme.

Advancing issues outnumbered declining ones on the NYSE by 2,090 to 965, for a 2.17-to-1 ratio on the upside; on the Nasdaq, 1,600 issues rose and 1,206 fell for a 1.33-to-1 ratio favoring advancers.

The S&P 500 posted 25 new 52-week highs and 5 new lows; the Nasdaq recorded 105 new highs and 60 new lows.

(Additional reporting by Tanya Agrawal; Editing by Don Sebastian and Frances Kerry)