Investors kept an upbeat outlook in light preholiday trade on Thursday as data buttressed views of steady economic growth, with stocks on track for a fourth straight week of gains.
New home sales and prices edged up in November, while consumer sentiment rose in December to its highest level since June, reports showed.
Banking shares lagged as investors booked profits after a month-long rally that has boosted the KBW Bank index <.BKX> by about 15 percent for December.
The index eased 1 percent on Thursday, as Bank of America Corp
With investor optimism running high and the S&P's relative strength index pointing to an overbought condition in the short term, the market could be in for a pullback, but investors weren't too concerned.
Keith Springer, president of Springer Financial Advisors in Sacramento, California, said the market is likely to trade sideways, rather than fall dramatically.
A sideways move can work off an overbought condition, said Springer. Just the fact that it slows down and moves sideways is almost a corrective pattern for the stock market.
The Dow Jones industrial average <.DJI> edged down 10.67 points, or 0.09 percent, at 11,548.82. The Standard & Poor's 500 Index <.SPX> dipped 4.36 points, or 0.35 percent, to 1,254.48. The Nasdaq Composite Index <.IXIC> eased 9.41 points, or 0.35 percent, to 2,662.07.
The latest American Association of Individual Investors' survey found bullish sentiment rose 13.1 percentage points to 63.3 percent, as of December 23, a six-year high.
The S&P 500 rose Wednesday to its highest level since the collapse of Lehman Brothers more than two years ago.
Volume was light Thursday as Wall Street prepared for a break on Friday for the Christmas holiday.
Resource shares led the way up as the price of oil rose to a more than two-year high above $91 a barrel. Chevron Corp
Retail stocks got a boost as Bed Bath & Beyond Inc
Fabric and crafts retailer Jo-Ann Stores Inc
The Morgan Stanley Retail index <.MVR> gained 0.4 percent.
Top U.S. memory chip maker Micron Technology Inc
In other data, jobless claims dipped but indicated that unemployment will stay high, consumer spending rose for a fifth month, and durable goods orders recorded their biggest increase since March.
(Editing by Jeffrey Benkoe)