The Dow and the S&P 500 rose on Thursday after Bank of America and General Electric rallied on positive broker comments, but investors were cautious a day before the release of key monthly non-farm payrolls data.

The latest Reuters poll suggests the U.S. economy stopped shedding jobs in December. U.S. stocks have rallied over the past month as investors have become more optimistic about the economy. Job growth would bolster that view while a weak report could disappoint.

I don't think there is going to be a number that is too good, said Jack Ablin, chief investment officer at Harris Private Bank in Chicago. Investors will be willing to look past the potential for higher interest rates.

But Ablin said investors may be setting themselves up for a fall by taking too rosy a view of Friday's number.

Thursday's small move higher pushed the Dow industrials and the S&P 500 to new 15-month highs, continuing the equity market's slow upward trend of recent weeks.

The top performer among S&P sectors was the financials <.GSPF>, which gained 2.1 percent after Credit Suisse upgraded Bank of America to outperform. The stock, a Dow component, climbed 3.3 percent to $16.93, while the KBW Banks index <.BKX> shot up 4.1 percent.

The Dow Jones industrial average <.DJI> gained 33.18 points, or 0.31 percent, to end at 10,606.86. The Standard & Poor's 500 Index <.SPX> added 4.55 points, or 0.40 percent, to 1,141.69. But the Nasdaq Composite Index <.IXIC> slipped 1.04 points, or 0.05 percent, to 2,300.05.

The CBOE Volatility Index <.VIX>, or VIX, hit a new 16-month intraday low at 18.70, before paring back around the closing bell at about 18.98, a drop of 1 percent. The move down may suggest a lack of bearish hedging bets ahead of Friday's jobs report. The VIX closed at 19.06, down 0.5 percent.

GE shares rose 5.2 percent to $16.25 after J.P. Morgan raised its price target on the stock to $22 from $20, saying investors underappreciate potential earnings recovery at the GE Capital finance unit.

A majority of retailers reported better-than-expected December sales, according to Thomson Reuters data, sending the S&P retail index <.RLX> up 0.8 percent.

Still, Abercrombie & Fitch sank 9.8 percent to $32.67 after December sales fell 19 percent, and American Eagle Outfitters Inc slid 3.1 percent to $17.02.

Sears Holding Corp was a bright spot, rising 11.6 percent to $99.18 after forecasting strong fourth-quarter profit.

The Nasdaq was pressured after Google Inc sweetened its bid for On2 Technologies with a cash portion that boosted the deal's value by 20 percent to $134 million, sending the stock down 2.3 percent to $594.09.

Shares of home builders took off after Lennar Corp posted its first quarterly profit in almost three years, pushing its shares up 12.9 percent to $15.46. The Dow Jones home construction index <.DJUSHB> rose 6.4 percent.

Volume was moderate on the New York Stock Exchange, with 1.19 billion shares changing hands, below last year's estimated daily average of 2.18 billion.

On the Nasdaq, however, about 2.30 billion shares traded, well above last year's daily average of 1.63 billion.

Advancing stocks outnumbered declining ones on the NYSE by a ratio of about 3 to 2, while on the Nasdaq, about four stocks rose for nearly every three that fell.

(Reporting by Edward Krudy; Editing by Jan Paschal)