U.S. stocks climbed Tuesday despite drops in consumer confidence and central Atlantic manufacturing conditions, as investors saw the economic weakness as a sign the Federal Reserve may be more likely to introduce more stimulus.

The Dow Jones Industrial Average closed up 46.10 points, or 0.43%, to 10858.14. Pfizer was the measure's best performer with an increase of 1.5%, while Intel was also strong with a 1.4% gain and Alcoa advanced 1.2%.

The Nasdaq Composite edged up 9.82, or 0.41%, to 2379.59, and the Standard & Poor's 500-stock index added 5.54, or 0.49%, to 1147.70.

The health care sector led the gains, boosted by a report of strong growth in sales and volumes of prescription drugs from Walgreen.

Shares of the drugstore operator jumped 11%. Reports on housing, consumer confidence and manufacturing in the central Atlantic region all indicated the economy remains weak. However, investors took the disappointing data as an indication that the Fed might make more moves to support the economy even if inflation is a byproduct.

Tuesday's trading also reflected end of month and end-of-quarter portfolio shuffling as the market approaches the conclusion of its best September since 1939. The Dow is up 8.4% for the month and up 4.1% for the year, having turned positive for 2010 this month.

European market

European stock markets finished slightly lower Tuesday amid further worries about sovereign debt, with French tire maker Michelin and Dutch chemicals group Akzo Nobel among the biggest decliners.

Financial stocks were mostly lower on expectations that Moody's Investors Service will cut its rating on Spanish debt as well as fears that Ireland's losses from bailing out Anglo Irish Bank could swell to EUR35 billion or more.

Still, markets rallied from their session lows after reports that the European Central Bank was buying Irish bonds. The Stoxx Europe 600 index fell 0.2% to 262.36, but was well above the low of 260.03 registered earlier in the session. Shares of Bank of Ireland dropped 7.4% and Allied Irish Banks retreated 5.7%, helping push the Irish ISEQ index down 0.9%.

Elsewhere in the banking sector, National Bank of Greece fell 3.2% and BBVA dropped 1.1%. Spain's IBEX 35 index fell 0.2% and the Greek ASE Composite declined 1.6%.

The French CAC 40 index edged down 0.1% to 3,762.35, as a 10% slump for Michelin shares weighed on the Paris benchmark index.

Among the other main markets, the German DAX 30 index ended down 0.04% to 6,276.09. The U.K.'s FTSE 100 index bucked the negative trend to end up 0.1% to 5,578.44. In Amsterdam, Akzo Nobel slipped 2.2% after the paints and specialty chemicals group set out medium term targets that disappointed investors.

Asian market

Asian stock markets ended lower Tuesday, with Chinese property developers falling on concerns Beijing may launch more measures to cool property prices, while Japanese shares were pulled lower by selling in stocks that went ex-dividend.

The Nikkei Stock Average fell 1.1%, South Korea's Kospi shed 0.3%, China's Shanghai Composite lost 0.6%, Hong Kong's Hang Seng Index declined 1.0%, and Taiwan's Taiex ended flat.

Persistent talk that Beijing may introduce more restrictive policies to make housing more affordable on the mainland hurt Chinese property developers and banks. China Vanke slid 2.8% in Shenzhen, while China Merchants Bank Co. shed 1.8% and Beijing Vantone Real Estate fell 3.3% in Shanghai.

Aluminum Corp. of China, or Chalco, jumped 4.3% and by the day's 10% limit in Shanghai on parent Chinalco's plan to invest CNY10 billion to develop rare earth resources and acquire a majority stake in Jiangxi Rare Earth and Rare Metals Tungsten Group.

The Japanese market was weighed by a large number of stocks trading ex-dividend. High yielding pharmaceutical stocks underperformed the market, with Eisai down 3.8% and Takeda Pharmaceutical 3.2% lower.

Base metals

Base metals on the London Metal Exchange swung back to positive territory after the dollar weakened against most currencies due to poor U.S. consumer confidence figures, market participants said Tuesday. U.S. consumer confidence fell sharply in September to 48.5, missing economists' expectations of 52.0.

The figure was the lowest reading since February 2010 and caused investors to sell out of the dollar due to concerns about the health of the U.S. economy.

LME base metals, which had initially fallen on dollar strength, began to rise as the dollar weakened against the euro. Crude futures settled lower Tuesday, as worries about demand for oil and fuel products trumped a sharp fall in the dollar.

Light, sweet crude for November delivery settled 34 cents lower at $76.18 a barrel on the New York Mercantile Exchange after falling as low as low as $75.53 in earlier trading. Brent crude on the ICE futures exchange traded 17 cents higher at $78.74 a barrel.

Oil prices aimed higher for much of Tuesday's session, gaining a boost from the weaker dollar, which makes oil cheaper for buyers in other currencies. But weak U.S. consumer confidence data and a drop in U.S. demand for gasoline combined to pull crude into the red, as traders worried about weak demand in the face of still high U.S. inventory levels.

Technical resistance levels also kept futures in a tight trading range that helped moderate the early rally. Gold futures settled above $1,300 for the first time, as investors bet the metal will hold its value more strongly than currencies and stocks amid ongoing concerns about the economic recovery.

Gold for September delivery, the nearby but thinly traded contract, rose $9.90, or 0.8%, to settle at a record $1,306.60 per troy ounce on the Comex division of the New York Mercantile Exchange. The most actively traded December contract finished 0.7% higher at $1,308.30, the metal's ninth record settlement in the last 11 sessions.