Nasdaq hits new all-time closing high

Stocks closed in positive territory Tuesday and the Nasdaq hit a record-closing high despite the weakest reading on the services sector of the economy in six years.

Traders returned from the long holiday weekend still digesting Friday's August jobs report that most investors say will keep the Federal Reserve from hiking interest rates later this month.

At the 4 p.m. ET close in first day of the holiday-shortened trading week, the Dow Jones industrial average, was up about 46 points, or 0.3%. The broad Standard & Poor's 500 stock index was 0.3% higher and the technology-dominated Nasdaq composite was up 0.5% to its new closing high of 5275.91. Its prior record was 5262.05 back on Aug. 15.

Holding stocks back was a weak reading on the services segment of the economy, which follows Friday's weak jobs report and Thursday's reading on August manufacturing, which showed contraction. The Institute for Supply Management’s non-manufacturing index slumped to 51.4, the lowest since February 2010, from 55.5 in July.

On Friday, stocks jumped in a relief rally after the economy created a lower-than-expected 151,000 jobs last month, a weak number that reduced the odds that the U.S. central bank will increase borrowing costs for the first time this year when they meet Sept. 20-21.

Investors are somewhat on edge amid a stock market that continues to hover near all-time highs but is trading at above-average valuations. November also has a reputation for a tough month for stocks, as it ranks as the worst month performance wise for the Dow in the past 50- and 100-year periods.

All three major U.S. stock indexes kick off the week within 1% of their all-time highs hit in mid-August.

With the Fed likely on hold until December and the release of third-quarter earnings more than five weeks away, Wall Street will focus its attention on the presidential campaign and incoming economic data that will provide clues on the health of the U.S. economy, which could grow at a 2.5% clip in the second half of the year after 1% growth in the first six months of the year, according to Barclays.

Wall Street was also reacting to deal news, including Volkswagen's move to take a $256 million, or 16.6%, stake in Navistar International (NAV) in an effort to get exposure in the U.S. heavy-truck market. Navistar's shares jumped more than 50%, while VW stock was off about 8%.The deal includes technology sharing and joint purchasing and related cost savings, the companies said Tuesday. In addition, Bayer AG upped its offer for Monsanto for a second time to $127.50 per share, which would price any deal at close to $56 billion.

Stocks in Asia were higher, with shares in Japan and Hong Kong, rising 0.3% and 0.6%, respectively. Shares were also higher in Germany and Paris.

Oil prices were virtually unchanged, with U.S.-produced crude up 1 penny to $45.05 per barrel.