Traders are also waiting for more indications on the health of U.S. companies from earnings reports.
A good start this week to the earning reports for the fourth quarter of last year helped the market Wednesday after aluminum company Alcoa predicted rising demand for aluminum this year.
Investors will be paying particular attention to the outlook for company sales during this reporting period, said Quincy Krosby, a market strategist at Prudential Financial. Revenue growth slowed to 0.4 percent in the third quarter of 2012, compared to growth of 11.4 percent in the same period in 2011, according to S&P Capital IQ data.
"The third-quarter earnings season top-line revenue growth pulled back," said Krosby. "That's of concern because, when all is said and done, markets are supposed to be a reflection of company earnings."
Supervalu Inc. rose 43 cents, or 14.1 percent, to $3.47 after announcing that it had reached a $3.3 billion deal to sell five of its biggest grocery chains â¿¿ Albertsons, Acme, Jewel-Osco, Shaw's and Star Market â¿¿ to an investor group led by the private equity firm Cerberus Capital Management.
The S&P 500 is already up 3.2 percent so far this year after lawmakers reached a last-minute compromise to stop the U.S. from going over the "fiscal cliff," a reference to sharp tax increases and across-the-board government spending cuts that could have pushed the economy back into recession.
Yet while the budget deal avoided many of the tax increases, it only put off the so-called sequestration, or spending cuts, that were part of the fiscal cliff threat.
Ben Schwarz, chief market strategist at Light Speed Financial, said stocks are unlikely to make substantial gains until lawmakers deal comprehensively with the government spending issue.
"Everybody gave each other high fives, running up and down in Washington because they did the fiscal cliff, but the big deal is about to come and smack them upside their head, all the real issues that they didn't want to deal with," Schwarz said. "Most people are now thinking, better to be safe than sorry."