Stocks closed higher on Thursday on solid economic data but gains were limited due to uncertainty regarding a Fed rate cut.
The Institute of Supply Management's non-manufacturing index came in unchanged for August but was an indication of continued growth in the services sector, while a separate government report showed an uptick in worker productivity in the 2nd quarter to an annualized gain of 2.6%.
"The ISM was better, labor costs were good from an inflation standpoint and got things moving in the right direction," said Tom Schrader, managing director of listed trading at Stifel Nicolaus.
A number of retailers such as Wal-Mart Stores surprised to the upside with an August same-store sales gain of 3.1%, excluding sales of fuel, from a year ago. The sales gain was led by strong back-to-school gains. Analysts expected a gain of less than 2%.
Shares of Apple fell after the company said it will give those who bought the iPhone before yesterday's price cut $100 in store credit.
Campbell Soup posted quarterly profit below analysts' estimates despite strong sales of its V-8 vegetable juice, as the company overhauled its supply chain in Australia and Indonesia.