Stocks held slight gains after a slew of economic news, including rising inflation and strong regional manufacturing data.
The Dow Jones Industrial Average rose more than 10 points a day after gaining modestly to once again hit multi-year highs.
Among Dow components, Coca-Cola and Intel rose, while American Express and Hewlett-Packard fell.
The S&P 500, which ended Wednesday at more than double its lowest level of the bear market, rose slightly as did the Nasdaq. The CBOE Volatility Index, widely considered the best gauge of fear in the market, rose to 17.
Among key S&P sectors, energy, materials and consumerstaples rose, while banks fell.
Iran continued to say it planned to move warships through the Suez canal in an action Israel called a "provocation," although news reports differed on Iran's true intentions.
Oil prices were mixed amid the news reports out of Iran, and amid further unrest in the Middle East, including news that police unleashed an attack in a square filled with peaceful protesters in Bahrain. Brent crude rose near $104 a barrel, while U.S. light sweet crude fell slightly, to still trade above $85 a barrel.
Meanwhile, gold rose above $1,380 an ounce. The dollar fell slightly against a basket of currenciesas the euro rose.
The firmer tone to the market, a day after the major indices all reached multi-year highs, largely reflected strength in the economic data, said Tom Schrader, managing director for U.S. equity trading at Stifel Nicolaus Capital Markets.
"I think most of the news we saw this morning was generally bullish," Schrader said, adding, "A little bit of inflation is a good thing."
The consumer price index rose 0.4 in January, while the core CPI, which excludes volatile food and energy prices, rose 0.2 percent, the Labor Department reported. Economists surveyed by Reuters had expected the overall CPI to rise by 0.3 percent, and the core CPI to rise 0.1 percent. (Read more: Whiffs of Inflation, but Strength in Some of Thursday's Numbers.)
In earnings news, Cliff's Natural Resources skyrocketed after reporting its fourth-quarter profit more than tripled on higher sales, a result that far exceeded analyst expectations.
Duke Energy gained in pre-market trading despite reporting earnings results of 21 cents-a-share that fell shy of analyst expectations for 23 cents, according to Thomson Reuters I/B/E/S.
And shares of Apache dropped after the independent oil and gas company released results that fell short of expectations. Apache has operations in Egypt, but the company said they have not been affected by the political unrest.
Weight Watchers skyrocketed more than 30 percent after its result beat expectations. The provider of weight management services said its fourth-quarter profits that more than doubled on higher sales from its Internet business.
Among tech companies, NetApp sank after reporting a hit to sales from shortages of components, an issue the data storage and management company expects will continue to plague the company. NetApp's fiscal third-quarter earnings, however, skyrocketed 60 percent.
Apple declined amid news reports that CEO Steve Jobs will attend a meeting with President Obama, along with execs of other top tech companies, including Facebook CEO Mark Zuckerberg and Google CEO Eric Schmidt, Reuters reported. Also, the National Enquirer published photos of a Jobs, looking thin, and arriving at the Stanford Cancer Center.
Elsewhere in energy news, Williams Companies gained after news the energy company plans to split into two entities, with one company focused on exploration and production and the other focused on infrastructure, such as pipelines.
Retail apparel stores were mostly higher on Thursday. Abercrombie & Fitch rose a day after reporting strong earnings, and after Susquehanna raised the teen retailer to "postive" from "neutral," and boosted its price target to $72 a share from $55. RBC raised its price target for the company to $57 a share from $50. Foot Locker , Aeropostale , and Chico's also led retail stocks higher.
In other economic news, the Philadelphia Federal Reserve index roseto 35.9 in February from 19.3 in January, the highest reading since January 2004. The employment index within the survey rose 6 points, and the percentage of firms reporting a increase in employment was above the percentage reporting a decline. The prices paid index rose 13 points in February.
Leading indicators, meanwhile, were up a slight 0.1 percent in January to 112.3, dragged down by a drop in building permits and continued softness in the labor market, the Conference Board reported. The leading indicators for December were revised down to a 0.8 percent gain. Economists surveyed by Reuters had expected a gain of 0.2 percent in January.
The government also reported that initial claims for unemployment rose more than expected last week. Claims rose 25,000 to a seasonally adjusted 410,000, according to the Labor Department. Economists surveyed by Reuters expected claims to rise to 400,000 from the previously reported 383,000. The government revised last week's figure upward to 385,000.
The four-week moving average of unemployment claims rose by 1,750 to 417,750.
Also, the U.S. Treasury will auction $9 billion in new 30-year Treasury inflation-protected securities, known as TIPS, on Thursday.
Before the European market open, Nestle reported an acceleration in underlying sales to 6.4 percent in the fourth quarter and said it was confident of achieving 5-6 percent sales growth in 2011.
France’s biggest bank BNP Paribas reported a rise in fourth-quarter profit, but missed forecasts. European shares closed near a 29-month high. The FTSEurofirst300 index closed flat.
On the Calendar:
THURSDAY: Leading indicators, Philadelphia Fed survey, Chicago Fed President speaks, money supply.
FRIDAY: Earnings before-the-bell from Campbell Soup.
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