NEW YORK -- A rising dollar and caution ahead of the government's monthly employment report kept investors from making big moves in the stock market for a third straight day.
Stocks stayed in a tight range Thursday as traders remain wary ahead of Friday's report on December employment. Analysts are expecting that the unemployment rate rose. The government reported a slight rise in weekly claims for unemployment benefits Thursday, though the increase was less than expected. The Labor Department said initial claims rose by 1,000 last week.
Stuart Schweitzer, global markets strategist at J.P. Morgan's Private Bank in New York, said markets are in a holding pattern as traders look to the jobs report.
"Everyone is waiting for the fireworks," he said.
Schweitzer predicts that traders would take in stride a modest loss or gain in jobs, but that any number well outside expectations could cause worries about a slide in the economy or, conversely, that rapid growth would risk triggering inflation.
"It's a case of not too hot and not too cold but somewhere in the middle," he said.
Upbeat December retail sales reports and increased forecasts lifted some retailers. Shoppers spent a little more over the holiday season, though consumer spending is expected to be weak amid continuing high unemployment and tight credit.
Sears Holdings Corp., which operates Kmart and Sears, Roebuck and Co., eked out a small gain and offered fourth-quarter guidance that was sharply above Wall Street estimates. Others, including Macy's Inc. and Limited Brands, raised their profit forecasts.
The reports come as investors hunt for more evidence of economic strength to sustain a 10-month bull run in the stock market. Trading in recent days has offered few clues about the direction of the markets in 2010 as investors hold back ahead of the jobs report. A stubbornly high unemployment rate remains one of the biggest drags on the economy, and investors are still waiting for hiring to rebound before concluding that a true recovery has taken hold.
In midday trading, the Dow Jones industrial average rose 0.68, or less than 0.1 percent, to 10,574.36. The broader Standard & Poor's 500 index fell 0.25, or less than 0.1 percent, to 1,136.89, and the Nasdaq composite index fell 9.99, or 0.4 percent, to 2,291.10.
Bond prices were mixed. The yield on the benchmark 10-year Treasury note, which moves opposite its price, slipped to 3.81 percent from 3.83 percent late Wednesday.
The dollar rose, and gold fell. A gain in the dollar weighs on commodity prices by making them more expensive for overseas buyers. That hurts energy and materials companies.
Trading on the stock market has been subdued for much of this week after a big gain on Monday spurred by stronger global manufacturing data. The cautious tone comes as investors await the December employment report. Economists forecast the unemployment rate rose to 10.1 percent from 10 percent and that employers shed 8,000 jobs.
Among retailers, Sears jumped $9.78, or 11 percent, to $98.65, while Macy's rose 18 cents, or 1 percent, to $17.28. Limited slipped 10 cents to $18.97 after rising in early trading.
Homebuilder Lennar Corp. said orders rose during its fiscal fourth quarter for the first time in more than three years. Buyers were taking advantage of lower prices and federal tax credits. The company also reported a profit as it benefited from an income tax adjustment. Its shares rose $1.74, or 12.7 percent, to $15.44.
Falling stocks narrowly outpaced those that fell on the New York Stock Exchange, where volume came to 442.3 million shares, compared with 397.5 million shares traded at the same point Wednesday.
The Russell 2000 index of smaller companies fell 0.31, or 0.1 percent, to 637.64.
Some overseas markets fell after China took steps to limit lending and prevent its economy from overheating. Traders fear the moves could affect economic growth around the world.