The Dow Jones Industrial Average edged up 5.69 points, or 0.04 per cent, to close at 13,625.58 while the Nasdaq drifted down 2.87 points, 0.11 per cent, to 2,706.16.
The broader S&P 500 Index shed 2.68 points, or 0.18 per cent, to 1,504.66.
The market held in a narrow range for most of the day as traders digested a strong two-day rally, fuelled in part by a White House-brokered mortgage rescue plan aimed at stemming a tide of home foreclosures that could cripple the US economy.
In what was seen as positive news for stocks, the government reported 94,000 jobs were added in the US economy in November. The unemployment rate held steady at 4.7 per cent.
The report was consistent with cooling growth but not with a severe downturn or recession some have feared. It also may allow the Federal Reserve to continue cutting interest rates, analysts said.
“The report reassured investors that the economy is not heading into a recession,” said Al Goldman, chief market strategist at AG Edwards. “At the same time, it did not discourage hopes for another interest rate cut when the Fed meets next week.”
Fred Dickson, chief market strategist at DA Davidson, said the mortgage aid plan and the prospect of lower interest rates helped Wall Street keep a positive tone.
“Investor confidence in housing and the economy has momentarily been restored by comments coming from the Fed governors, the ability of major financial institutions to raise capital to restore their balance sheet and the president's proposal to partially stabilize the housing market,” he said.
“Time will tell if this marked the ultimate bottom of the slide in the sub-prime mortgage market or was a temporary stopping point.
“The stock market has rallied in tandem with the rally in the sub-prime secondary mortgage market. Unless the Fed delivers a lump of coal into Wall Street's stocking next Wednesday, we see the current rally continuing through year-end.”
Most analysts expect the Fed to cut its federal funds rate, currently at 4.50 per cent, by a quarter of a percentage point. A few say a half-point cut is possible, but that likelihood was diminished by the employment report.
Among stocks in focus, News Corporation added 0.41 per cent to $US21.93 as the media conglomerate headed by Rupert Murdoch announced a series of management changes as it prepares to close its deal to acquire Dow Jones, owner of The Wall Street Journal.
Yum Brands advanced 0.95 per cent to $US39.42as the owner of KFC and Pizza Hut restaurants boosted its outlook for global earnings growth.
In technology, Palm slid 12.9 per cent to $US5.74 as the maker of smart phones said shipping delays would dent profits.
Bonds lost ground as markets braced for next week's Fed meeting. The yield on the 10-year US Treasury bond rose to 4.120 per cent from 3.998 per cent on Thursday and that on the 30-year bond increased to 4.585 per cent from 4.479 per cent.