US stocks were modestly higher in choppy trade overnight as investors weighed economic data that was better than expected ahead of the release later in the day of a key Federal Reserve document.
Industrial Average was up 7.10 points (0.07 per cent) at 10,275.91a day after posting triple digit gains.
The technology-heavy Nasdaq composite index was flat, adding 0.18 point (0.01 per cent) at 2214.37 and the broad-market Standard & Poor's 500 index edged up 0.45 point (0.04 per cent) to 1095.32.
The volatile trading came after Wall Street stocks ended yesterday in their best one-day advance in three months on renewed economic optimism that pushed the Dow up 1.68 per cent.
"The big picture remains bullish," said Al Goldman, chief market strategist at Wells Fargo Advisors.
"Yesterday was impressive, but we doubt there are enough anxious buyers to keep the lift going. We believe the more likely scenario is highs for this rally in a day or so and then more selling," he said.
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A series of economic reports broadly pointed to a continued, but slow, recovery from recession.
Industrial production jumped 0.9 per cent in January on the back of increased activity in manufacturing, utilities and mining, the Federal Reserve said on Wednesday, in a report that topped analyst expectations.
"The details of the report are encouraging for economic growth," Briefing.com analysts said in a client note.
Separately, the Commerce Department reported housing starts rose at an annualised 2.8 per cent in January from December, to the highest level in six months, signalling stabilisation in the troubled sector.
Investors were expected to pore over the minutes of the January 26-27 policy meeting of the US Federal Reserve in search of details on the central bank's exit strategy from extraordinary measures to support the recovery.
Inflation, a key issue for the Fed, appears subdued, according to the latest Labor Department report that showed a 1.7 per cent rise in import prices in January, driven by higher energy prices.
Ryan Sweet at Moody's Economy.com said the increase would not be duplicated in February because "lower energy prices will be a drag".
"Rising import prices don't alter the outlook for core consumer prices to remain below the Federal Reserve's soft target of 2.0 per cent this year," Mr Sweet said.
Among stocks in focus, farm equipment maker Deere surged 5.04 per cent to $US56.49 after reporting quarterly earnings better than market expectations.
Hewlett-Packard added 0.93 per cent at $US49.90. The world's largest computer maker will report earnings after the market close.
Pharmacy giant Walgreen inched up 0.21 per cent to 34.15 after announcing it is buying New York-based drugstore chain Duane Reade for $US1.075 billion ($1.19 billion), including the assumption of debt.
Simon Property Group rose 1.43 per cent to $US75.89. General Growth Properties, the rival shopping mall operator under bankruptcy restructuring, responded to Simon's acquisition offer saying Simon should respect its reorganisation process.
Bonds pulled back. The yield on the 10-year Treasury bond rose to 3.691 per cent from 3.664 per cent yesterday and that on the 30-year bond increased to 4.672 per cent from 4.639 per cent. Bond yields and prices move in opposite directions.
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