Stocks eked out gains for a third-consecutive session Thursday, with the 10-year note yield pushing closer to the psychological threshold of 3 percent, as investors digested a flurry of economic reports and ahead of the government's widely-watched monthly jobs report.
(Read more: Pro strategies as 10-year nears 3 percent )
The Dow Jones Industrial Average squeezed out a gain of 6.61 points to close at 14,937.48, led by American Express. The blue-chip index traded in a narrow 65-point range.
The S&P 500 ticked up 2 points to finish at 1,655.08. And the Nasdaq rose 9.74 points to end at 3,658.78. The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, closed below 16.
The Dow and S&P 500 are poised for their best week in nearly two months.
Among key S&P sectors, financials gained, while interest-rate sensitive areas such as telecoms and utilities slumped.
"On average, over the last 50 years, September has been the worst month of performance for the S&P 500 Index by far," wrote Scot Wren, senior equity analyst at Wells Fargo Advisors. "Over the next few weeks, investors will be presented with a number of issues that are going to drive stock market behavior in at least the nearer term and possibly much longer."
"The list is long," he continued. "The future of the Fed's QE program, Syria, the debt ceiling debate in Congress and German elections to name a few."
On the economic front, the pace of growth in the services sector rose to its highest since December 2005, according to the Institute for Supply Management.
The 10-year Treasury yield topped 2.97 percent following the report, hitting a fresh two-year high.
(Read more: Art Cashin: Beware this market 'trip wire')
But factory orders dropped 2.4 percent in July, according to the Commerce Department.
On the jobs front, weekly jobless claims declined to a near five-year low, according to the Labor Department. And the number of jobs in the private sector grew by 176,000 in August, up from 200,000 jobs created in the previous month, according to payroll processing giant ADP.
Meanwhile, the number of planned layoffs soared to hit its highest in nearly six months, according to a report from consultants Challenger, Gray & Christmas.
The trio of employment data came a day ahead of the Labor Department's widely-watched employment report on Friday, almost two weeks before the Fed's September policy-setting meeting. Economists polled by Reuters expect non-farm payrolls to have increased by 180,000 jobs last month, up from a gain of 162,000 the month prior.
(Read more: To taper or not: Jobs scrutinized for next Fed move)
"Uncertainty's always a negative in the short-term for the market, but the underlying trend in the economy has been good and that's a positive," said John Fox, co-manager of the FAM Value Fund.
Groupon soared after Morgan Stanley raised its rating on the daily-deal site to "overweight" from "equalweight."
Costco rose after the wholesale retailer posted August same-store sales that exceeded Wall Street estimates, despite lower fuel costs and weak foreign exchange rates.
Yahoo unveiled a new logo, the first re-design since the firm was founded nearly 20 years ago. The redesigned look is part of a makeover that Yahoo has undergone since Marissa Mayer to became the company's CEO a little over a year ago.
JCPenney soared following reports from the New York Post that the retailer is scrapping the Martha Stewart brand due to poor sales of the brand. The move comes as a judge is expected to soon rule in a lengthy court battle between JCPenney and Macy's over which chain has the right to sell the Martha Stewart line. Shares of Martha Stewart Living dropped as the company said it has no intention of ending its agreement with JCPenney.
The euro dropped to a 6-1/2 week low against the U.S. dollar as the European Central Bank kept rates on hold, with ECB President Mario Draghi repeating that the central bank is committed to keeping interest rates low for an extended period.
Meanwhile, President Barack Obama faced growing pressure from world leaders not to launch military strikes in Syria at the Group of 20 summit on the global economy in St. Petersburg, Russia.
U.S. Senate Majority Leader Harry Reid said he is "guardedly optimistic" that the Senate will approve approve Syria use-of-force resolution by the end of next week, according to Reuters, citing a Senate aide.
The Senate's Foreign Relations Committee approved the authorization of limited military intervention in Syria on Wednesday, setting the stage for a contentious debate in the Senate on September 9, when it is expected to vote on military action.
—By CNBC's JeeYeon Park (Follow JeeYeon on Twitter:
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FRIDAY: Fed's Evans speaks, nonfarm payrolls, Fed's George speaks; Earnings from Smithfield Foods, Mattress Firm
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