Stocks ticked higher on Thursday after a labor market report indicated the economy was slowly recovering, but the data wasn't enough for the S&P 500 to significantly extend recent gains.
The broad index is approaching levels not seen since before the 2008 financial crisis.
Equities have rallied more than 8 percent so far this year, and more than 20 percent from lows reached in October. But investors believe further gains are limited as the S&P flirted with the 1,360 level, its highest since last May.
The index has been unable to break convincingly above the level in the past several sessions. While a solid break above 1,360 could trigger more gains, the likelihood of a pullback increases with each failed attempt.
Right now there's a question of what other bazookas the bulls have to keep driving gains, and there doesn't seem to be many, said Roger Volz, director of cash equities at BGC Financial in New York.
In addition, there are big concerns about what impact rising crude prices could have on the consumer, as well as recession fears in Europe. That could take us lower.
The Dow Jones industrial average <.DJI> was up 42.65 points, or 0.33 percent, at 12,981.32. The Standard & Poor's 500 Index <.SPX> was up 3.90 points, or 0.29 percent, at 1,361.56. The Nasdaq Composite Index <.IXIC> was up 18.26 points, or 0.62 percent, at 2,951.43.
In a sign the labor market was improving, new U.S. claims for unemployment insurance held at the lowest level since the early days of the 2007-2009 recession.
Data from another key sector of the economy also suggested improvement.
U.S. home prices rose 0.7 percent in December, the government said. The Dow Jones U.S. Home Construction index <.DHUSHB> rose 1.7 percent.
Among homebuilders, D.R. Horton Inc
U.S. crude futures rose 0.7 percent, extending recent gains that have taken them up 8.6 percent so far this month. Oil service shares <.OSX> were modestly higher after gaining 1.7 percent Wednesday.
Fellow retailer Target Corp
Sears Holdings Corp
The S&P retail index <.RLX> rose 0.6 percent.
According to Thomson Reuters data through Thursday morning, of the 446 companies in the S&P 500 that have reported earnings, 63 percent topped analysts' expectations.
(Reporting By Ryan Vlastelica; Editing by Kenneth Barry)