The stock market traded in a tight range Wednesday as investors got further confirmation that the economy is improving, but at a slow pace. The major indexes closed mixed.
The Federal Reserve said regional economic activity has generally improved since its last such report in October. The Fed also said consumer spending has strengthened even as employment and commercial real estate remain weak.
A mixed reading on the labor market had stocks wavering ahead of the Fed's assessment. The ADP National Employment Report said 169,000 private sector jobs were lost in November, fewer than the 195,000 lost in October but worse than the 160,000 cuts expected by economists polled by Thomson Reuters. It was the eighth monthly drop in job losses at private companies.
Investors are keenly focused on the job market, which remains in a funk despite signs of life in manufacturing, housing and other parts of the economy.
"It all falls apart if you don't get jobs to come around," said Bill Stone, chief investment strategist at PNC Wealth Management.
The ADP report, while it doesn't represent the entire economy, is often seen as a good indicator of what will emerge in the government's closely watched monthly employment report, which is due on Friday. Economists are expecting the unemployment rate remained flat at 10.2 percent last month.
In other trading, the dollar rose slightly against other major currencies, while Treasurys were mixed.
Trading has been volatile in recent days as investors try to assess whether the massive gains in the stock market since early March accurately reflect the economy's strength. Investors have been worried that the nascent recovery could be threatened by economic problems overseas or missteps by the government and the resulting gyrations in the dollar. Worries over a potential debt crisis in Dubai caused a temporary halt in buying last week.
Preliminary calculations showed, the Dow Jones industrial average fell 18.90, or 0.18 percent, to 10,452.68. The Standard & Poor's 500 index rose 0.38, or 0.03 percent, to 1,109.24, and the Nasdaq composite index rose 9.22, or 0.42 percent, to 2,185.03.
The listless trading followed a surge in stocks on Tuesday that was driven by a weaker dollar and higher commodities prices. The Dow rose 126 points and traded above the 10,500 level for the first time since October last year. A months-long slide in the dollar, the result of rock-bottom interest rates, has encouraged investors to buy riskier assets that have the potential to earn better returns.
Analysts say trading likely will remain choppy through the rest of the year due to opposing forces in the market. Some investors are exiting the market, looking to lock in the gains they've amassed since the rally began in March, while others who may have missed out are looking to get in.
Trading in foreign exchange, commodities and debt markets was mixed as traders remained cautious.
"People don't know where to go," Stone said. "That wait-and-see attitude has kicked in."
The ICE Futures US dollar index, which measures the dollar against other major currencies, edged up 0.3 percent. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.32 percent from 3.29 percent late Tuesday.
Gold prices surged to a new high of $1,218.40 an ounce, while oil prices fell $1.77 to settle at $76.60 a barrel on the New York Mercantile Exchange.
Overseas, Japan's Nikkei stock average rose 0.4 percent. Britain's FTSE 100 gained 0.3 percent, Germany's DAX index rose 0.1 percent, and France's CAC-40 added 0.5 percent.