Stocks rose slightly in a choppy session on Thursday as investors grappled with euro zone uncertainty, a raft of corporate earnings and economic data that painted a mixed picture of the domestic recovery.
Spain's successful debt auction and solid earnings from Bank of America and Morgan Stanley led to early optimism, but that quickly dissipated as speculation swirled that France's sovereign debt rating could be downgraded. A senior French source told Reuters the rumors were unfounded.
Citi analysts said in a note it is likely Moody's will place France's Aaa rating on review for possible downgrade by the autumn. France lost its 'AAA' rating earlier in the year and ongoing budget crises have kept worries about the region near the front burner for investors.
The FTSEurofirst 300 <.FTEU3> index of top European shares fell from earlier highs and traded near flat.
The Dow Jones industrial average <.DJI> was up 34.62 points, or 0.27 percent, at 13,067.37. The Standard & Poor's 500 Index <.SPX> was up 3.68 points, or 0.27 percent, at 1,388.82. The Nasdaq Composite Index <.IXIC> was up 20.59 points, or 0.68 percent, at 3,052.04.
Spain, the latest trouble spot in the euro zone debt crisis, sold 2.5 billion euros ($3.3 billion) of bonds in a successful auction, but yields rose as Madrid struggled to tame its deficit.
The ECB's efforts to pump liquidity into the system has taken fears of a banking crisis off the table, but all the problems are still there for all these countries, said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.
For U.S. investors, it's just going to be simmering on the back burner, maybe it comes to the front burner, and back and forth. It's still going to be a major issue and is not going to go away anytime soon.
New claims for unemployment benefits fell less than forecast last week, Labor Department data showed, tempering expectations for a pick-up in job creation in April after March's slowdown.
The claims numbers at face value, sure it's a disappointment for the stock market ... We really need to see another week or two before we conclude the labor market is slowing down considerably, so I take it with a big grain of salt, said Brown.
Bank of America Corp
Travelers Cos Inc
Verizon Communications Inc
According to Thomson Reuters data, 35 companies in the S&P 500 are due to report Thursday. Notables after the close include Microsoft Corp
Of the 77 S&P 500 companies reporting through the opening bell, 81 percent beat estimates.
Thursday's slew of economic data sent mixed signals to investors. The pace of factory activity in the mid-Atlantic region waned in April for the first time in five months, while a gauge of future economic activity rose in March to the highest level in nearly four years.
Meanwhile, home resales fell in March but the supply of properties on the market tightened as prices inched higher.
Biotechnology issues helped lift the Nasdaq, led by Human Genome Sciences Inc
Human Genome rejected an unsolicited $2.6 billion bid from long-time partner GlaxoSmithKline Plc
Gilead's combination of experimental hepatitis C drugs developed with Bristol-Myers Squibb Co
U.S.-listed shares of Glaxo gained 1.1 percent to $46.88 and Bristol-Myers rose 1.9 percent to $34.20. The Nasdaq biotech index <.NBI> climbed 2.7 percent.
(Reporting By Chuck Mikolajczak; editing by Jeffrey Benkoe)