Energy leads Wall Street higher, but airlines weigh

NEW YORK (Reuters) - Energy shares led U.S. stocks to modest gains on Tuesday as crude prices jumped, but consumer-related and transportation shares limited the rise.

Stocks pared gains on stronger-than-expected profits and outlooks after the first day of quarterly earnings reports.

U.S. crude futures settled 2 percent higher at $91.11 per barrel after new production snags added to supply concerns even as the Trans Alaska Pipeline remained shut, idling 12 percent of U.S. oil production.

Chevron , up 1.4 percent at $91.70, gave the Dow industrials the biggest lift.

"There's a big feeling were going to have $100 barrel oil pretty quickly," said Shawn Hackett, president at Hackett Advisors in Boynton Beach, Florida.

He said that is clearly bullish for the sector, but oil above $90 a barrel could "take disposable income away from the economy and could hurt demand."

Airline shares were hit by the rise in crude, with the NYSE Arca airline index off 1.5 percent and the Dow Jones transport average lost 1 percent after hitting its highest in more than two years on Monday. The S&P retail index dipped 0.3 percent.

The Dow Jones industrial average added 23.31 points, or 0.20 percent, to 11,660.76. The Standard & Poor's 500 rose 2.76 points, or 0.22 percent, to 1,272.51. The Nasdaq Composite gained 4.87 points, or 0.18 percent, to 2,712.67.

Among companies reporting fourth-quarter results higher than expected was homebuilder Lennar Corp , which gained 7.4 percent to $20.30.

The PHLX Housing sector index gained 1.5 percent.

Stocks have rallied in recent weeks on optimism about profits, but the S&P 500 ended down the past three sessions, leading some analysts to question the rally's durability.

"When you see a market going up in the morning and pulling back later in the day, it's saying there's some distribution going on, and at some point it may lead to a well overdue correction," Hackett said.

Retailers were also hit as women's clothier Talbots Inc shares tumbled 18.8 percent to $6.15 after it forecast a much bigger-than-expected quarterly loss.

Leading declines on the Dow, Verizon Communications Inc fell 1.8 percent to $35.27 after Verizon Wireless announced it will begin selling a version of Apple Inc's iPhone. The news was expected, and Verizon had risen more than 11 percent in the past six weeks.

Short-term technical resistance for the benchmark is seen round 1,280 while the area between 1,265 and 1,260 provides support.

Sears Holding Corp rose 6.3 percent to $75.02 after the store chain raised its profit outlook above Wall Street estimates, citing strong sales.

Alcoa Inc posted a quarterly profit that topped Wall Street's expectations, though revenue slightly missed the analysts' average estimate. The aluminum maker's shares fell 1.2 percent to $16.29.

MBIA Inc rose 13.4 percent to $13.92, a level not seen since 2008, after a divided New York appeals court handed the bond insurer a crucial win in the legal battle over its restructuring plan.

(Reporting by Rodrigo Campos; additional reporting by Alina Selyukh; Editing by Kenneth Barry)