Stocks rose and U.S. Treasuries fell on Thursday as U.S. data showed strength in the economy, but investors were mainly focussed on Friday's closely followed U.S. unemployment report for economic clues.
Oil prices eased as a drop in weekly U.S. jobless claims, an unexpected rise in pending home sales in July and slightly stronger factory orders failed to soothe concerns about economic weakness in the world's largest energy consumer.
The euro was flat against the dollar after comments from European Central Bank President Jean-Claude Trichet and the decision by the bank's Governing Council to keep interest rates at a record low of 1 percent.
U.S. Treasury debt prices eased as some strength on Wall Street undermined the safe-haven appeal of government debt.
The Dow Jones industrial average <.DJI> was up 1.67 points, or 0.02 percent, at 10,271.14. The Standard & Poor's 500 Index
<.SPX> was up 3.53 points, or 0.33 percent, at 1,083.82. The Nasdaq Composite Index <.IXIC> was up 8.83 points, or 0.41 percent, at 2,185.67.
The market was braced for a disaster after what we saw with existing sales, so this is positive, while the factory orders looked a little light compared with expectations, said John Canally, investment strategist at LPL Financial in Boston.
People are reluctant to do much of anything today except position themselves for tomorrow and digest yesterday's gains.
World stocks <.MIWD00000PUS> hit a two-week high earlier as optimism from strong U.S. and Chinese manufacturing data extended into a second day.
I would expect that we are going to have a pretty quiet day today. I would say if we are able to hold even through the day and hold on to (Wednesday's) gains that is a good sign, said Peter Jankovskis, co-chief investment officer at Oakbrook Investments LLC, in Lisle, Illinois.
The FTSEurofirst 300 index <.FTEU3> of top European shares was slightly lower after surging 2.9 percent on Wednesday, their biggest gain since May, on upbeat manufacturing data from China and the United States.
The market showed little reaction to Thursday's decision by the European Central Bank to keep interest rates on hold at a record low, as expected, amid tepid economic recovery and persistent concerns about the banking sector.
The euro was up 0.02 percent at $1.2814 from a previous session close of $1.2811 supported by healthy results at Spanish and French bond auctions and stable global equities.
France and Spain sold 12.2 billion euros of bonds, with the average yield on the 5-year Bono dropping at auction and the paper easily absorbed as the yield fell after the tender.
Against the Japanese yen, the dollar was down 0.14 percent at 84.30 from a previous session close of 84.420.
The focus now is on the Labour Department's widely watched monthly employment report, with analysts predicting U.S. non-farm payrolls probably fell for a third straight month in August.
Currency markets are not paying too much attention to anything but the jobs number tomorrow, said Greg Salvaggio, vice president of trading at Tempus Consulting in Washington.
U.S. Treasury debt prices extended early losses after the release of July factory orders and pending home sales data.
The benchmark 10-year U.S. Treasury note was down 13/32, with the yield at 2.6249 percent. The 30-year U.S. Treasury bond was down 36/32, with the yield at 3.7107 percent.
U.S. crude oil fell 51 cents, or 0.69 percent, to $73.40 per barrel on concerns about a slowing economic recovery and high oil inventories, while spot gold prices rose $3.75, or 0.30 percent, to $1,247.60.
(Additional reporting by Vivianne Rodrigues, Ryan Vlastelica, and Chuck Mikolajczak; Editing by Kenneth Barry)