Wall Street flat to slightly up before debt vote

NEW YORK: US stocks were little changed and off the day's highs on Thursday, with market sentiment mixed before a key vote in Congress on a plan to prevent a US default.

Stocks got an early lift from strong pending US home sales data and a dip in jobless claims, a day after the S&P 500 posted its biggest fall in eight weeks and its third day of losses.

Uncertainty over Washington's ability to agree on a plan to reduce the US budget deficit before an Aug. 2 deadline has kept investors nervous about the possibility of a debt default or a US credit ratings downgrade.

Some analysts expressed optimism that lawmakers may come to a deal ahead of the deadline, while others said they were less hopeful.

A vote on a bill to cut the US deficit and raise the debt limit is expected after the close of trading on Thursday. US House of Representatives Speaker John Boehner is pushing to pass a bill in the Republican-majority House, while the Democratic-controlled Senate is crafting a competing bill.

"The market doesn't want to move in a linear fashion," said Thomas Villalta, portfolio manager for Jones Villalta Asset Management in Austin, Texas.

He said that is partly because of the dissension among the ranks of lawmakers, making investors less certain that a deal can happen.

Still, the CBOE Volatility Index was down 0.5 percent after three days of sharp gains.

"Volatility and volume are reflecting avoiding risk right now and waiting on clarity," said Marc Pado, US market strategist at Cantor Fitzgerald & Co in San Francisco. "It's mainly just a watching-and-waiting kind of situation" until the vote.

The Dow Jones industrial average was down 1.62 points, or 0.01 percent, at 12,300.93. The Standard & Poor's 500 Index was up 1.97 points, or 0.15 percent, at 1,306.86. The Nasdaq Composite Index was up 12.92 points, or 0.47 percent, at 2,777.71.

Among gainers, Green Mountain Coffee Roasters jumped 16.9 percent to $103.03 after the company said late Wednesday its third-quarter sales rose 18 percent. Green Mountain was among the top gainers on the Nasdaq.

Exxon Mobil Corp, the world's largest publicly traded oil company, however, reported results that fell short of expectations and its stock fell 2.1 percent to $81.58.

Pending sales of existing US homes unexpectedly rose 2.4 percent in June from May, up sharply from a year ago.

New weekly claims for unemployment benefits fell below 400,000 for the first time since early April.

Copyright Reuters, 2011