U.S. stocks edged up on Wednesday, supported by data that pointed to stabilization in the labor and housing markets -- two sectors largely considered responsible for slowing down a recovery.

New claims for jobless benefits fell sharply in the latest week, while sales of new U.S. single-family homes rose in October to their highest level in a year. Yet another government report showed U.S. consumer spending increased more than expected in October. Even consumer sentiment picked up slightly in November from an initial reading for the month, according to the Reuters/University of Michigan survey.

The positive economic data offset a report on new orders for long-lasting U.S. manufactured goods that unexpectedly fell in October, weighing on stocks in early morning trading.

Investors got easier numbers to digest from home sales and consumer sentiment, and they were able to focus on the positive aspects of a recovery, said Scott Marcouiller, senior equity market strategist at Wells Fargo Advisors in St. Louis.

The Dow Jones industrial average <.DJI> advanced 20.33 points, or 0.20 percent, at 10,454.04. The Standard & Poor's 500 Index <.SPX> gained 3.15 points, or 0.28 percent, to 1,108.80. The Nasdaq Composite Index <.IXIC> rose 5.54 points, or 0.25 percent, to 2,174.72.

Trading volume was extremely light, with stocks traded in a tight range in the session just before the Thanksgiving holiday.

The market also got a lift from a weaker U.S. dollar, which fell 0.7 percent to an almost 15-month low against a basket of currencies <.DXY> a day after minutes from the Federal Reserve's November meeting showed U.S. policy-makers saw the dollar's recent decline as orderly.

As investors assess the recovery's strength, they're also questioning whether the S&P 500's 22 percent rise this year still has legs.

The Chicago Board Options Exchange Volatility Index <.VIX>, or the VIX, a favorite barometer of investor sentiment, sank to its lowest intraday level in 15 months. The VIX dropped as low as 20.05 intraday on Wednesday.

On the earnings front, shares of Tiffany & Co rose 3.9 percent to $43.46 after the luxury retailer reported third-quarter earnings that beat expectations and raised its full-year profit view.

Deere & Co shares gained 2.9 percent to $53.80, erasing earlier losses after the world's largest maker of tractors and harvesters reported quarterly results.

(Reporting by Angela Moon; Editing by Jan Paschal)