U.S. stocks rose on Tuesday after surprisingly strong November retail sales boosted optimism about consumer spending in the holiday shopping season, even as the Federal Reserve issued yet another cautious statement about the economy.

The Fed, in a policy statement after its last scheduled meeting of 2010, said the economic recovery was still too slow to bring down unemployment and reaffirmed its commitment to purchase $600 billion in bonds to stimulate growth and create jobs, as had been expected.

I'm slightly disappointed that the (Fed) doesn't see the world in the same light that investors do, said Andrew Wilkinson, senior market analyst at Interactive Brokers in Greenwich, Connecticut. They're just being prudent, but it is disappointing, though not concerning.

Sales at U.S. retailers rose 0.8 percent in November, up for a fifth straight month and pointing to a firm rebound in consumer spending, which accounts for roughly two-thirds of the U.S. economy.

But shares of Best Buy Co Inc took a beating after the top U.S. electronics chain posted a third-quarter profit that missed expectations and cut its full-year profit view, denting optimism over the sector. Its shares plummeted 16 percent to $35.23.

Best Buy pressured the S&P retail index <.RLX>, sending it down 0.2 percent.

The data was encouraging overall and shows that retailers are driving traffic into the stores, said Liam Dalton president of Axiom Capital Management Inc in New York, which oversees about $1.4 billion. But Best Buy is a reminder that there's a lot of discounting and market share being pulled in several directions, meaning it could still be a choppy Christmas season.

The Dow Jones industrial average <.DJI> was up 75.08 points, or 0.66 percent, at 11,503.64. The Standard & Poor's 500 Index <.SPX> was up 5.05 points, or 0.41 percent, at 1,245.51. The Nasdaq Composite Index <.IXIC> was up 10.02 points, or 0.38 percent, at 2,634.93.

Healthcare stocks were boosted by company news. Medical device maker C.R. Bard Inc rose 4.6 percent to $90.06 after it forecast 14 percent yearly earnings growth in 2011, while brokerages gave bullish marks to companies including Amgen and Mylan Inc . Amgen rose 4 percent to $56.29 and Mylan added 4 percent to $20.64.

The S&P health care sector <.GSPA> rose 1.1 percent.

Yahoo Inc shares were little changed at $16.70 a day after sources said the Internet company plans to lay off more than 600 employees.

Adding to positive sentiment, President Barack Obama's tax plan got a boost on Tuesday when a top Democrat in the House of Representatives, where the plan faces its stiffest resistance, said there were compelling reasons to back it.

While passage of the bill, which extends all Bush-era tax rates, is expected, many investors are waiting for confirmation of its passage.

Separate data on Tuesday showed U.S. producer prices rose more than expected in November as energy prices spiked, but underlying inflation pressures remained subdued.

(Editing by Leslie Adler)

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