In U.S. economic news, the Philly Fed Index was minus 1.6 in April. Weekly jobless claims came in at 247,000, the lowest since 1973.
"I do think from an economic standpoint one of the bright things we'd been seeing was these regional manufacturing numbers pick up pretty reasonably well. Then Philly Fed came out of nowhere," said Ben Pace, CIO at HPM Partners.
U.S. crude oil futures settled down $1, or 2.26 percent, at $43.18 a barrel, pressured by some strength in the dollar and the disappointing Philly Fed read.
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European stocks were mixed after the European Central Bank kept rates unchanged and ECB President Mario Draghi said he expects rates to remain at present or lower levels for an extended period, according to Dow Jones.
Draghi also said risks to euro area growth remain tilted to the downside, and that inflation rates could turn negative again in the coming months before picking up in the second half of the year, Dow Jones reported. He added it is essential to preserve appropriate accommodation as long as needed.
The STOXX Europe 600 Bank index closed nearly 1.4 percent higher.
The euro near session lows around $1.127 after earlier rising to trade around $1.139. The U.S dollar index reversed to hold mildly higher, with the yen near 109.45 yen against the greenback. Gold spiked to its highest since March 1 before settling down $4.10 at $1,250.30 an ounce.
"The euro rallied at first but I think the move was somewhat unwarranted because Draghi didn't say anything that was deemed as hawkish," said Thierry Albert Wizman, global interest rates and currencies strategist at Macquarie. He said recent strength in the U.S. dollar and the rise in Treasury yields was related to expectations of higher inflation and the Fed moving sooner rather than later.
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The euro/dollar and other currencies remained in a tight range for the session.
"The market is thinking the ECB policy is not as effective as Mario Draghi wants to have it and questioning whether or not they will continue on this path given the implications for the European economy and the political landscape." Omar Aguilar, CIO of equities, Charles Schwab Investment Management.
In other U.S. economic news, the FHFA Housing Price Index showed a 0.4 percent rise in February, after a downwardly revised 0.4 percent rise in January.
Leading indicators in March rose 0.2 percent.
Treasury yields held higher, with the 2-year yield near 0.80 percent and the 10-year yield around 1.87 percent. Earlier, both yields hit their highest since late March.