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Meanwhile, U.S. officials were at the Group of Seven (G-7) meeting of finance ministers and central bank chiefs in Dresden, Germany, on Thursday, which will continue until Friday. Greece is on the agenda, as well as reviving global growth.
The dollar hit a nearly 13-year high against the yen before trading around 123 yen. The euro traded above $1.09.
"I think it's not so much that something's changed than more a function of the strength of those currencies," said Mark Luschini, chief investment strategist at Janney Montgomery Scott. He noted that better-than-expected, although not robust, economic data "was enough to stem the decline in the dollar."
At the Treasury market, the benchmark 10-year yield was near 2.13 percent, while the 2-year yield was 0.61 percent.
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The Treasury Department sold $29 billion in seven-year notes at a high yield of 1.888 percent on Thursday. The bid-to-cover ratio, an indicator of demand, was 2.49 and the best since January.
"In trying to glean some message from the results, there wasn't much of any. As I stated yesterday, the yield curve now seems to be gyrating between tightening on the long end when participants think the Fed will drag their feet with the first rate hike and flattening on hints that they might not wait much longer," Peter Boockvar, chief market analyst at The Lindsey Group said in a note following the sale.
Weekly initial jobless claims came in at 282,000, up slightly from last week's 274,000 read.
Pending home sales rose 3.4 percent in April, their highest in 9 years.
"We're getting some confirming signals that the housing market is getting better," said Maris Ogg, president at Tower Bridge Advisors. "That would be good for the overall economy.
Natural gas inventories rose by 112 billion cubic feet, more than analysts expected. U.S. crude inventories fell for the fourth straight week.
On Friday, there will be the second estimate of first-quarter economic growth.
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About three stocks declined for every two advancers on the New York Stock Exchange, with an exchange volume of 690.20 million and a composite volume of 2.934.30 billion.
Crude oil futures closed up 17 cents to $57.68 a barrel on the New York Mercantile Exchange. Gold futures settled up $2.50 to $1,188.10 an ounce.
The CBOE Volatility index, considered to be the best measurement of volatility, was at 13.
Companies reporting on Thursday include Abercrombie & Fitch, plus a number of Canadian banks, such as Royal Bank of Canada.
Avago Technologies will buy chip maker Broadcom for $37 billion in cash and stock, consisting of $54.50 in cash and 0.4378 Avago shares for each share of Broadcom.
Costco reported quarterly earnings of $1.17 per share, two cents above estimates, though revenue and comparable store sales were below forecasts. The warehouse retailer was hurt by lower gasoline prices and a stronger dollar. Abercrombie lost 53 cents per share for its latest quarter, wider than the 34 cent consensus estimate. Revenue missed forecasts amid an eight percent drop in comparable store sales. The apparel retailer did say it sees sales improving, and that it will see continued headwinds from foreign currency fluctuations.
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San Francisco Fed President John Williams said in Singapore on Thursday he expects the U.S. economy to grow about 2 percent and unemployment to drift below 5 percent this year, Reuters reported. Williams cautioned that more economic data needs to be collected before a decision on interest rates is made.
—CNBC's Peter Schacknow and Reuters contributed to this report.