Investors treaded water for a second day Wednesday as a batch of mixed economic reports and signs of division among Federal Reserve policymakers offered little insight into the economy.
Stocks ended little changed but modest gains pushed the Standard & Poor's 500 index to a new 15-month high. The cautious tone seen Tuesday and Wednesday comes as investors await the government's monthly employment report Friday.
The day's economic news wasn't enough to galvanize traders still trying to determine which direction the market will take in the early part of 2010.
A sign of growth in the services industry gave some support to stocks. The Institute for Supply Management said its services index rose to 50.1 in December from 48.7 in November. A reading above 50 signals growth.
The welcome news about service companies was offset by a report that employers cut 84,000 private sector jobs last month. The ADP National Employment Report came in worse than the forecasts of analysts polled by Thomson Reuters.
The latest batch of reports are similar to what investors have seen months — figures that reveal modest improvements but remind them that the economy remains weak. The stock market has been rising for 10 months on signs that the economy is recovering but analysts say stronger signs of growth will be needed to feed its advance in 2010.
Minutes from the Fed's December meeting showed that a "few members" thought that the central bank's $1.25 trillion program to buy mortgages could need to grow, rather than be phased out on March 31. The report did little to deepen investors' insight into the Fed's intentions for interest rates. Treasury prices fell as the minutes underscored some traders' concerns about inflation.
Dave Rovelli, managing director of trading at brokerage Canaccord Adams in New York, said traders aren't willing to place big bets ahead of the Labor Department's report at the end of the week. Economists expect that the unemployment rate ticked up to 10.1 percent in December from 10 percent in November.
Weekly figures for initial claims for jobless benefits are due on Thursday.
"The unemployment number on Friday is the big deal," he said. "And it's light volume so I wouldn't be surprised if we just drift higher."
The Dow Jones industrial average rose 1.66, or less than 0.1 percent, to 10,573.68. The broader Standard & Poor's 500 index rose 0.62, or 0.1 percent, to 1,137.14, while the Nasdaq composite index fell 7.62, or 0.3 percent, to 2,301.09.
Three stocks rose for every two that fell on the New York Stock Exchange, where volume came to 1.1 billion shares, in line with Tuesday.
Bond prices fell, pushing their yields higher. The yield on the benchmark 10-year Treasury note rose to 3.83 percent from 3.76 percent late Tuesday.
John Dorfman, chairman of Thunderstorm Capital LLC in Boston, said the market is likely being weighed down by investors who waited to sell some of their winning stocks from last year until this week because the taxes will fall under 2010. Beyond tax moves, however, he said many traders are going to be reluctant to wade back into stocks until the market shows more direction. Ultimately, he expects improvements in the economy will push stocks higher.
"My own view is that a genuine and fairly strong recovery is under way and that the market will probably gain 10 percent or more in 2010," Dorfman said.
The dollar mostly fell against other major currencies. Gold rose.
Crude oil rose above $83 per barrel for the first time since October 2008, settling up $1.41 at $83.18 on the New York Mercantile Exchange.
The Russell 2000 index of smaller companies fell 0.54, or 0.1 percent, to 637.95.