Little movement ahead of jobs data

NEW YORK - Investors treaded water for a second day yesterday amid mixed economic reports and signs of division among Federal Reserve policymakers.

Modest gains pushed the Standard & Poor's 500 index to a 15-month high. The cautious tone seen Tuesday and yesterday comes as investors await the government's monthly employment report tomorrow.

The day's economic news was not enough to galvanize traders still trying to determine which direction the market will take in the early part of 2010.

A sign of growth in the services industry gave some support to stocks. The Institute for Supply Management said its services index rose to 50.1 in December from 48.7 in November. A reading above 50 signals growth.

That news was offset by a report that employers cut 84,000 private-sector jobs last month. The ADP National Employment Report came in worse than the forecasts of analysts polled by Thomson Reuters.

And minutes from the Fed's December meeting showed that a "few members" thought the central bank's $1.25 trillion program to buy mortgages could need to grow, rather than be phased out March 31.

The Dow Jones industrial average rose 1.66, or 0.02 percent, to 10,573.68. The broader S&P 500 index rose 0.62, or 0.05 percent, to 1,137.14, its highest close since Oct. 1, 2008. The Nasdaq composite index fell 7.62, or 0.33 percent, to 2,301.09.

John Dorfman, chairman of Thunderstorm Capital L.L.C., of Boston, said the market was likely being weighed down by investors who waited to sell some of their winning stocks from last year until this week because the taxes will be triggered in 2010. Beyond tax moves, however, he said many traders were going to be reluctant to wade back into stocks until the market showed more direction. Ultimately, he expects improvements in the economy to push stocks higher.

"My own view is that a genuine and fairly strong recovery is under way and that the market will probably gain 10 percent or more in 2010," Dorfman said.

The dollar mostly fell against other major currencies. Gold rose.

Crude oil rose above $83 a barrel for the first time since October 2008, settling up $1.41 at $83.18 on the New York Mercantile Exchange. The gains lifted stocks of energy companies.

The Russell 2000 index of smaller companies fell 0.54, or 0.08 percent, to 637.95.

Britain's FTSE 100 rose 0.1 percent, Germany's DAX index rose less than 0.1 percent, and France's CAC-40 advanced 0.1 percent. Japan's Nikkei stock average rose 0.5 percent.