US STOCKS-Wall Street inches higher on strength in retailers

* Luxury store Tiffany & Co (NYSE: TIF - news) rises after results,

* Clothier Jos. A. Bank rallies after Men's Wearhouse offer

* Data shows housing recovery unfazed by higher mortgage rates

* Indexes up: Dow 0.2 pct, S&P 0.3 pct, Nasdaq 0.7 pct

By Luke Swiderski

NEW YORK, Nov 26 (Reuters) - U.S. stocks edged up on Tuesday after strong housing figures, retailer earnings and a proposed acquisition lifted those two industry sectors.

Tiffany & Co jumped 7.3 percent to $88.29 and was the S&P 500's best performer after the luxury retailer's third-quarter sales topped expectations and the company boosted its outlook for full-year profits. The S&P retail index advanced 0.9 percent.

Jos. A. Bank Clothiers Inc surged 11.2 percent to $56.24 after Men's Wearhouse offered to buy the company for $55 per share in cash. Men's Wearhouse jumped 9.9 percent to $51.73.

The PHLX Housing Index rose 2.5 percent after stronger-than-expected figures on building permits for October and a steady rise in housing prices. Ryland Group (NYSE: RYL - news) led the index, gaining 5.5 percent to $39.99 a share.

Permits for future U.S. home construction hit a 5-1/2 year high and an index of single-family home prices notched big gains in September, suggesting higher mortgage rates have not halted the housing recovery.

Investors remained cautious about placing new bets after the market's rally has sent indexes to record highs. The S&P 500 has risen nearly 27 percent this year, bolstered by expectations the Federal Reserve's stimulus will continue at least until the end of the year.

But low implied volatility, measured by the CBOE Volatility Index, has some investors concerned. The VIX was down 1.9 percent to 12.55 on Tuesday.

"The problem is that the VIX is so below average, and with the indexes at all-time highs ... you would think that there would be someone betting, 'Boy, there is a correction coming.' And no one is," said Brian Battle, director of trading at Performance Trust Capital Partners in Chicago.

The Walt Disney Company (NYSE: DIS - news) led the Dow, with shares rising 1.7 percent to $70.91. The company announced better-than-expected earnings earlier in the month. [ID: nL2N0IS2CK]

The Dow Jones industrial average was up 32.94 points, or 0.20 percent, at 16,105.48. The Standard & Poor's 500 Index was up 5.07 points, or 0.28 percent, at 1,807.55. The Nasdaq Composite Index was up 26.53 points, or 0.66 percent, at 4,021.10.

The Conference Board's index of consumer confidence unexpectedly fell in November as Americans worried about their future jobs and earnings prospects.

Trading is expected to remain light this week, with financial markets closed Thursday for the Thanksgiving holiday. Markets will also close early at 1 p.m. (1800 GMT) the following day.