United States stocks rose, breaking out a five-day rut that was the longest losing streak this year for the S&P 500.
The Dow Jones Industrial Average advanced 55.04 points, or 0.4%, to close at 15,328.30 points. Thursday's advance was the first since the Dow industrials hit a record high last week. The blue chips had lost 404 points, or 2.6%, over the five sessions ended Wednesday.
The S&P 500 tacked on 5.90 points, or 0.3%, to 1,698.67 points, snapping its own five-session slide.
The Nasdaq Composite Index gained 26.33 points, or 0.7%, to 3,787.43 points.
Gains were modest but broad. Nine of the S&P 500's sectors advanced, led by consumer-discretionary and telecommunications stocks.
Uncertainty over the Federal Reserve's policy intentions and rising tension in Washington surrounding budget and debt-ceiling talks have ushered anxiety into the stock market in recent days. On Thursday, lawmakers were grappling over a short-term spending bill to keep the government running when the next fiscal year starts Oct. 1.
"What's going on in Washington is a distraction," Wilmington Trust Investment Advisors chief investment officer Rex Macey said.
"These kind of movements in the short term are typical given the noise we're getting," he said. "It's pretty normal to see a pause in the market. People are getting set, looking toward what's going to happen when third-quarter earnings start in October."
Just a week removed from fresh all-time highs, some investors pointed to signs of stock-market resilience.
"I've been impressed with the market's breadth," said Doug Ramsey, chief investment officer at the Leuthold Group, a research and asset-management firm in Minneapolis.
"Things are in gear, with cyclical and small-cap stocks showing leadership."
The Russell 2000 index of small-capitalization stocks has climbed 6.7% this month, while growth-sensitive industrial and materials stocks have been the best performers.
Mr. Ramsey said that, historically, stocks continue to rise when investors throw their weight behind these riskier corners of the market. The Dow is up 3.5% in September, and 17% so far this year.
On the economic front, the number of Americans seeking new unemployment benefits remained near six-year lows in the latest week, with the number of initial jobless claims falling 5,000 to a seasonally adjusted 305,000. The reading was lower than economist forecasts.
A third look at second-quarter gross domestic product was left unrevised at 2.5%, on a seasonally adjusted annual rate, versus economist forecasts for a revised growth rate of 2.8%.
Americans signing contracts to buy previously owned homes fell in August for the third month in a row, as an index for pending sales of existing homes declined 1.6%, slightly more than expected.
Traders attributed the recent slide in stocks more to investors trimming their winning positions than to pessimism about the market's future direction.
"We hit all-time highs five days ago, so it's logical that the market is going to take a pause here," said Frank Ingarra, head trader at NorthCoast Asset Management. "[Less] stuff is totally undervalued in this market, but we think it can go higher from here," he said.
The yield on the 10-year Treasury note ticked up to 2.643% from a six-week low of 2.615% late Wednesday.
November crude-oil futures edged up 0.4% to settle at $103.03 a barrel, after settling at a near three-month low on Wednesday. September gold futures fell 0.9% to settle at $1,323.60 a troy ounce. The dollar gained ground against both the yen and the euro.
European markets were little changed, while Asian markets were mixed. The Stoxx Europe 600 gave up late session gains to end unchanged. Japan's Nikkei Stock Average rallied 1.2% to a two-month high, as a weakened yen helped lift exporter shares. China's Shanghai Composite fell 1.9%.
In corporate news, Hertz Global Holdings fell 16% after the company lowered its earnings guidance, citing weaker-than-expected volume generated by its namesake brand in the US airport car-rental market.
Facebook gained 1.9%. Shares crossed the $50 threshold for the first time as the stock continues its sharp rise and investors cheer the social-media company's mobile growth.
Eli Lilly fell three% after the company said an experimental cancer drug failed to meet its target in a large, late stage trial of breast-cancer patients, a setback in the company's hopes that the agent will be effective against a wide range of tumours.
Bed Bath & Beyond rallied 4.5% after the retailer reported late Wednesday fiscal second-quarter earnings and revenue that topped analyst estimates, and provided an upbeat earnings outlook for the current quarter.