On the economic front, the consumer sentiment index slipped to 80 in August from 85.1 in July, according to the Thomson Reuters/University of Michigan's preliminary reading on the overall index.
Housing starts rose 5.9 percent to a seasonally adjusted annual rate of 896,000 units in July, according to the Commerce Department, which was less than the expected 900,000 unit rate expected by economists polled by Reuters. June's starts were revised up to show a 846,000-unit pace instead of the previously reported 836,000 units.
"The housing numbers were reasonably healthy—they're not as robust as they were earlier in the year but there's been some concern about rates being notably higher and whether that's going to choke off the recovery in housing," said Kaufler. "And the consumer sentiment reading—even when it was a disappointing number—was already telegraphed by the recent weak reports from retailers."
Most homebuilders including Pulte and DR Horton gained following the report.
Kaufler said he is bullish on the homebuilders.
"By historic norms, even if rates tick up a little from here, I don't think it undercuts the rebound in housing," he explained.
And nonfarm productivity rose in the second quarter at a 0.9 percent annual rate as output increased more than hours worked, according to the Labor Department. Economists polled by Reuters had expected productivity to gain at a 0.6 percent rate.
Among earnings, Dell topped quarterly expectations, but profits were 72 percent below year-ago levels amid falling PC sales.
