Caution still dominated trading ahead of the release of existing home sales data shortly after the open. The market first rallied on Thursday after news of an unexpected jump in new home sales, before selling off amid concerns about the direction of interest rates.
The Dow Jones Industrial Average was up 47 points at 13,488, as 21 of its 30 components advanced, led by General Motors Corp. , Honeywell Inc. , Boeing Co. and 3M Corp. .
Deal news has remained the key fuel of the market's advance, along with share buy backs, as deals reduce the overall share count and leads investors to make bets on potential acquisition targets.
Dow component Coca-Cola gained 1% after saying it's agreed to buy Energy Brands Inc., also known as Glaceau, for $4.1 billion. The acquisition will provide Coca-Cola with Energy Brands' enhanced water products, including the vitaminwater and smartwater brand.
The S&P 500 gained 4.60 points to 13,516, while the Nasdaq Composite gaomed 11 points to 2,548.
Nasdaq dropped 4%. It said it would pay $3.7 billion for OMX. The U.S. exchange has been under pressure to find a partner following its failed bid for the London Stock Exchange and after rival the New York Stock Exchange completed a deal to buy Euronext, creating NYSE Euronext .
Trading volumes are also expected to remain thin ahead of the three-day Memorial Day weekend.
There were 91 million shares exchanging hands on the New York Stock Exchange and 117 million trading on the Nasdaq stock market. Advancing issues outpaced decliners by 3 to 1 on the NYSE and by 16 to 7 on the Nasdaq.
The key housing sector remains in focus, with economists expressing doubts that a surge in new home sales in April was driven by a plunge in prices as homebuilders try to liquidate inventory.
Existing home sales, driven by existing home owners, might prove more sticky. Economists polled by MarketWatch are expecting sales in April to have slipped to 6.11 million, from 6.12 million.
The dollar strengthened slightly against the yen after a report that North Korea had fired several short-range missiles into the Sea of Japan. The U.S. currency was a touch lower against the euro. Against the Japanese currency the dollar added 0.3% at 121.65 yen.
Oil prices firmed, with the July light crude contract adding 64 cents to $64.82 a barrel in electronic trading.
Gold futures advanced, along with oil, adding $3.30 to $656.60 an ounce.
Bonds fell ahead of the housing data. The benchmark 10-year Treasury bond was down 2/32 at 97 7/32, yielding 4.857%.
Late Thursday, Gap Inc. posted a 26% decline in quarterly profit, hit by steep markdowns and a write-down related to store closures.
The New York Times reported that the Securities and Exchange Commission has started an inquiry into whether two Dow Chemical executives secretly tried to arrange a sale of the company.
Aeropostale late Thursday said first-quarter net income climbed 64% to $13.8 million, or 26 cents a share, from $8.36 million, or 15 cents a share, a year earlier. The New York clothing retailer said sales for the period ended May 5 grew 12% to $275.8 million.
Shares of Verigy were indicated up over 8% in the pre-open market after it swung to a profit of $22 millionor 36 cents a share.
Among companies due to report Friday, Agilysys is expected to report fourth-quarter earnings of 24 cents a share.
By Nick Godt