The Dow and S&P 500 advanced on Thursday to halt a two-session losing skid, buoyed by gains in industrial and energy shares as U.S. Treasury yields eased, while the Nasdaq lost ground for a third straight session.

Major indexes advanced early as worries about a faster pace of interest rate hikes by the U.S. Federal Reserve were eased by comments by St. Louis Fed President James Bullard, who expressed concerns that a "bunch of hikes" could turn Fed policy restrictive. Benchmark 10-year U.S. Treasury yields retreated from the more than four-year highs hit on Wednesday.

Those gains faded, however, and major indexes finished well off session highs as investors exercised caution in what is likely to be a rising interest rate environment.

"The rally on Bullard was a little overzealous," said Michael O'Rourke, chief market strategist at JonesTrading in Greenwich, Connecticut.

"I wouldn't be out there aggressively buying stocks because until the interest rate picture clarifies, and it probably will do so at a higher level, it is just going to create problems for equities," he said.

The concerns over rising interest rates have dogged Wall Street of late, and stocks stumbled on Wednesday after minutes from the Federal Reserve's January meeting showed the central bank's rate-setting committee grew more confident in the need to keep raising rates.

Market participants are still largely expecting the Fed to raise rates three times this year, beginning with its next meeting in March.

Despite the recent climb in rates, many analysts expect the stock market to be able to absorb the rise as long as economic data remain supportive and the pace of the increase is modest.

The Dow Jones Industrial Average rose 164.7 points, or 0.66 per cent, to 24,962.48, the S&P 500 gained 2.63 points, or 0.10 per cent, to 2,703.96, and the Nasdaq Composite dropped 8.14 points, or 0.11 per cent, to 7,210.09.

Benchmark 10-year notes last rose 5/32 in price to yield 2.9225 per cent, from 2.941 percent late on Wednesday.

Industrial shares climbed 0.59 per cent, led by a 3.04 per cent gain in Quanta Services Inc after its quarterly results and a 3.34 per cent rise in United Technologies Corp after the aero parts maker said it is exploring a breakup of its business portfolio.

Energy stocks, up 1.08 per cent, also helped support gains, as oil prices advanced on a surprise draw in U.S. crude inventories.

Chesapeake Energy Corp shares surged 21.67 per cent, their biggest daily percentage gain since April 2016, after the company's quarterly results and outlook.

Advancing issues outnumbered declining ones on the NYSE by a 1.09-to-1 ratio; on Nasdaq, a 1.41-to-1 ratio favored decliners.

The S&P 500 posted two new 52-week highs and nine new lows; the Nasdaq Composite recorded 58 new highs and 47 new lows.

Volume on U.S. exchanges was 6.81 billion shares, compared to the 8.44 billion average for the full session over the last 20 trading days.

CANADIAN MARKETS

Canada's main stock index closed marginally lower on Thursday as resource-related gains on a rise in commodity prices were offset by declines in consumer stocks after weak retail sales data, and investors digested a raft of corporate earnings reports.

The Toronto Stock Exchange's S&P/TSX composite index was down 15.84 points, or 0.1 per cent, at 15,508.17.

CCL Industries ended the day with the biggest gains on the index, up 9.3 per cent, after the label manufacturer reported better-than-expected fourth-quarter profits.

Mining-related companies SNC-Lavalin Group and Kirkland Lake Gold and energy companies Peyto Exploration & Development, Secure Energy Services were among the biggest gainers.

SNC-Lavalin's profit topped expectations and the company gave a strong forecast for 2018.

Spot gold prices rose 0.55 per cent to US$1,330.89 an ounce, while silver advanced 0.7 per cent to US$16.608 an ounce. Base metals also rose, with copper futures up 0.6 per cent at US$7,162 a tonne.

Oil futures joined the uptrend, with U.S. crude climbing 1.6 per cent to US$62.69 a barrel.

The basic materials group on the TSX was the biggest gainer, rising 0.4 per cent, followed by energy, with a 0.3 per cent advance.

Infrastructure services provider Stantec Inc was the biggest decliner on the index, sliding 11 per cent after its fourth-quarter earnings missed estimates.

Canada Goose and Gildan Activewear were among the biggest decliners on the index, falling 4.6 per cent and 3 per cent respectively.

Canadian retail sales unexpectedly declined in December, putting fourth-quarter economic growth on track to be below the central bank's forecast.

Despite the gains in metal prices, gold producers IAMGOLD Corp and Alamos Gold were among the biggest decliners, retreating 8.4 per cent and 7.1 per cent respectively after reporting fourth-quarter losses.

There were 114 advancing issues and 126 declining ones. Ten were flat.