Stocks traded flat to slightly higher Thursday after two straight days of declines as jobless claims data showing improvement in the U.S. labor market helped offset revived concerns about the euro zone's fiscal stability.
Government data showed the number of Americans submitting claims for new jobless benefits fell to the lowest in nearly four years last week, indicating the labor market is slowly improving.
The data comes ahead of Friday's key employment report, when the stock market is closed for the Good Friday holiday.
The claims data remains going in the right direction as the U.S. economy recovers. It also jives with some of the manufacturing numbers we have been getting - like the ISM that remains well above 50 and shows a reasonably good expansion, said Sean Kraus, chief investment officer of CitizensTrust in Pasadena, California.
Investors kept watch on Spain and its ability to meet budget targets in the wake of the Spanish government's poorly received bond sale on Wednesday, which triggered fears about funding difficulties for weaker euro-zone countries, as the effects of the European Central Bank's huge liquidity injections may be diminishing.
An International Monetary Fund spokesman said on Thursday that Spain is facing severe challenges that call for sustained economic reforms by the government.
There are obviously some issues in Europe that are starting to get people's attention and can be a reason for the fast money to pull out, but I don't think you are seeing what you saw last year in terms of a dramatic downshift in the market, Kraus said.
Economists polled by Reuters expect the nonfarm payrolls report due on Friday will show the U.S. economy added 203,000 jobs in March. That would represent a fourth straight month of solid job creation, marking the longest stretch of monthly employment gains topping 200,000 since 1999.
The Dow Jones industrial average <.DJI> slipped 11.09 points, or 0.08 percent, to 13,063.66. The Standard & Poor's 500 Index <.SPX> inched up just 0.01 of a point, or unchanged on a percentage basis, to 1,398.97. The Nasdaq Composite Index <.IXIC> gained 13.37 points, or 0.44 percent, to 3,081.46.
Some retailers' shares advanced after they reported March same-store sales that topped forecasts as mild weather and an early Easter spurred consumers to shop for bright-colored clothes and other seasonal items last month. The stronger-than-expected March sales prompted some retailers to raise their profit expectations for the quarter.
The S&P retail index <.RLX> climbed 1 percent.
For March, the Thomson Reuters Same Store Sales Index registered a robust gain of 4.3 percent, well above the forecast of a 3.5 percent rise.
Bed Bath & Beyond Inc
PPG Industries Inc
(Editing by Jan Paschal)