U.S. stocks narrowly fluctuate amid China stock slump, data

U.S. stocks wavered in a tight range in the morning session Tuesday, as investors were meditating on a sharp sell-off in Chinese stock market amid upbeat data.

By midday, the Dow Jones Industrial Average dipped 20.41 points, or 0.12 percent, to 17,524.77. The S&P 500 decreased 4.19 points, or 0.20 percent, to 2,098.25. The Nasdaq Composite Index was down 18.23 points, or 0.36 percent, to 5,073.47.

Chinese shares nosedived on Tuesday with the benchmark Shanghai Composite Index dropping 6.15 percent to close at 3,748.16 points.

The market has showed signs of recovery in the past few days with the Shanghai Index reaching more than 4,000 points before falling back to just above 3,700 Tuesday afternoon.

Despite government's reassurance about continued stabilization of the market, concerns remain that authorities could pull rescue funds.

On the economic front, U.S. housing starts came in much better than expected. Privately-owned housing starts in July were at a seasonally adjusted annual rate of 1,206,000, the highest rate since October 2007, said the Commerce Department Tuesday.

This is 0.2 percent above the revised June estimate of 1,204, 000 and is 10.1 percent above the July 2014 rate of 1,095,000.

Privately-owned housing units authorized by building permits in July were at a seasonally adjusted annual rate of 1,119,000. This is 16.3 percent below the revised June rate, but is 7.5 percent above the July 2014 estimate.

"The housing market looks poised to remain on solid footing heading into the second half of 2015, ahead of the Fed's possible interest rate increase that could come by year end," said Sophia Kearney-Lederman, an economic analyst at FTN Financial, in a note. Endite