U.S. stocks barely budged Thursday, as gloomy news about Europe's economy dampened the impact of better-than-expected jobless claims and two big M&A deals.
The Dow Jones industrial average slipped 0.1%, while the S&P 500 and Nasdaq added 0.1%. The negligible moves were enough to nudge the S&P 500 up to a fresh five-year high.
On the positive side, the Labor Department reported that the number of Americans filing for first-time unemployment claims fell by 27,000 to 341,000 in the latest week. Economists were expecting 365,000 claims.
Thursday also brought a slew of merger news.
Warren Buffett's Berkshire Hathaway and 3G Capital agreed to buy Heinz for $28 billion. Shares of the ketchup-maker spiked 20%. Shares of fellow food company Campbell Soup rose 1.4%.
US Airways and American Airlines parent AMR officially announced an $11 billion deal to create the world's largest airline. Shares of US Airways fell 4.6%, while AMR jumped 63%.
Shares of Constellation Brands surged 37% after Anheuser-Busch InBev agreed to give up key assets in an effort to address antitrust issues related to is proposed $20 billion takeover of Mexican brewer Grupo Modelo.
But investors were cautious after data showed the eurozone suffered its third consecutive quarter of declining growth at the end of 2012. Performances in all four of the region's biggest economies -- Germany, France, Italy and Spain -- also deteriorated compared with the third quarter of 2012.
Plus, after a strong start to the year, it's not unusual for stocks to take a breather. Even with the recent slips and slides, the Dow is within 1.5% of its all-time high, hit in October 2007, and the S&P 500 is about 4% shy of its record high, also set in October 2007. And all three indexes are up between 6% and 7% for the year.
As long as economic news continues to point to modest growth, stocks should keep advancing and reach new highs as investors continue to make their way back into the stock market, said Peter Cardillo, chief market economist at Rockwell Global Capital.