* U.S. retail sales up more than expected in November
* Best Buy cuts full-year outlook; shares dip
* Stocks up: Dow 0.4 pct, S&P 0.3 pct, Nasdaq 0.4 pct (Updates to morning trade)
By Angela Moon
NEW YORK, Dec 14 (Reuters) - U.S. stocks rose slightly on Tuesday as better-than-expected retail sales last month boosted optimism about consumer spending in the holiday shopping season.
But gains were limited as a sharp drop in Best Buy Inc shares after a weak outlook also weighed on other TV and mobile-device makers.
Sales at U.S. retailers increased more than expected in November, rising for a fifth straight month and offering further evidence the economic recovery gathered steam in the fourth quarter.
"This increase, which was well above expectations, shows us that consumers are continuing to ramp up their spending and are happy to head back to stores in the midst of the holiday shopping season that is so critical for retailers," said Jim Baird, chief investment strategist for Plante Moran Financial Advisors in Michigan.
"Compared to a year ago, the results are very encouraging. A year-over-year increase in retail sales of nearly 8 percent is very good."
The Dow Jones industrial average was up 46.74 points, or 0.41 percent, at 11,475.30. The Standard & Poor's 500 Index was up 3.56 points, or 0.29 percent, at 1,244.02. The Nasdaq Composite Index was up 9.34 points, or 0.36 percent, at 2,634.25.
Best Buy shares fell 15 percent to $35.61 after the top consumer electronics retailer reported a decline in quarterly results and same-store sales and cut its full-year outlook, citing weak demand in its key U.S. market.
U.S.-traded shares of Sony Corp also slipped 0.7 percent to $35.63 and Gamestop Corp fell 1.4 percent to $21.65.
The Federal Reserve's monetary policy committee meets later Tuesday, and the group's statement is expected to leave interest rates unchanged and evaluate the central bank's recent massive bond-buying program to support the economy.
But the Fed may revise its economic outlook to reflect stronger growth after the White House and congressional Republicans agreed to extend tax breaks and provide a payroll tax cut, effectively delivering fresh stimulus. The statement is due at about 2:15 p.m.
Separate data showed U.S. producer prices rose more than expected in November as energy prices spiked, but underlying inflation pressures remained subdued.