By Anna Hirtenstein and Gunjan Banerji
The Dow Jones Industrial Average edged higher Thursday as weekly jobless claims declined and investors looked ahead to Friday's monthly jobs report.
The blue-chip index rose 85.73 points, or 0.3% to 29969.52. The Nasdaq Composite climbed 27.82 points, or 0.2% to 12377.18, setting another record.
The S&P 500 rose for much of the day before edging lower ahead of the closing bell, snapping a two-session streak of gains. The broad stock-market gauge closed down 2.29 points, or 0.1%, to 3666.72.
Major U.S. stock indexes have repeatedly eked out fresh records on the back of investors' optimism that Covid-19 vaccines will accelerate the economic rebound next year. But rich valuations for stocks and elevated infection levels are tempering some of that cheer, leading to more subdued moves in recent days.
Weekly jobless claims, seen as a proxy for layoffs, dropped to 712,000 for the week ended Nov. 28. That was lower than economists had expected, reflecting a moderate improvement in the pace of recovery of the labor market. The monthly jobs report will be released Friday.
Meanwhile, activity in the U.S. services sector expanded for the sixth straight month in November, a sign that activity held up despite the rise in Covid-19 cases, IHS Markit data showed Thursday.
"Markets have been driving higher, seeing 2021 as the year economies will snap back," said Peter Dixon, an economist at Commerzbank. "There is concern a lot of the good news is already priced in, so I don't expect markets to go shooting into the stratosphere any time soon, but we could see a general grind higher."
Shares of airlines, cruise operators and small companies -- sectors that have benefited from enthusiasm about a vaccine -- outperformed the broader market.
American Airlines stock gained $1.23, or 8.3%, to $16.09. Royal Caribbean's stock added $3.76, or 4.7%, to $84.40.
The Russell 2000 of small companies advanced 0.6%.
Anna Rathbun, chief investment officer of CBIZ Investment Advisory Services, said she increased exposure to small companies recently, in part because of optimism about the economic recovery and the vaccine.
"We understand that it may be rocky, but we are long-term investors," Ms. Rathbun said of the recovery.
Uncertainty surrounding the vaccine was on display Thursday, as Pfizer said it expects to ship half of the Covid-19 vaccines it originally planned for this year because of supply-chain problems.
Pfizer and BioNTech SE had hoped to roll out 100 million vaccines world-wide by the end of the year. That plan has now been reduced to 50 million. This development weighed on some of the enthusiasm surrounding the vaccine late in the trading session.
In other corporate news, Tesla shares gained $24.56, or 4.3%, to $593.38 after Goldman Sachs upgraded the stock's rating to buy and raised the price target to $780. That's about a 31% jump from where shares closed Thursday. Tesla will be added to the S&P 500 later this month, which would prompt passive funds that track the index to add the stock to their portfolios.
In bond markets, the yield on the 10-year U.S. Treasury note edged down to 0.919%, from 0.948% on Wednesday.
Overseas, the pan-continental Stoxx Europe 600 was little changed.
European regulators are expected to make a decision on approving the use of coronavirus-vaccine candidates at the end of the month. Speedier moves by the U.K. and the U.S. will give those nations an edge and could make their stocks more attractive, investors said.
"Europe seems to be the laggard when it comes to vaccine rollouts, it seems like it will take longer to approve," said Shaniel Ramjee, a multiasset fund manager at Pictet Asset Management. "And logistically, Europe is more fragmented and might not be uniform."
In Asia, most major benchmarks ended the trading session higher. The Shanghai Composite Index was an exception, edging down 0.2%. American lawmakers on Wednesday approved legislation that could result in a trading ban on the shares of U.S.-listed Chinese companies over concerns about their audit quality.
Write to Anna Hirtenstein at email@example.com and Gunjan Banerji at Gunjan.Banerji@wsj.com
(END) Dow Jones Newswires