The Dow and the S&P 500 rose on Thursday after Bank of America and General Electric rallied on positive broker comments, while the Nasdaq slipped as 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. On Friday morning, investors will have to interpret what that could mean for the Federal Reserve's interest-rate policy. Higher rates sooner could be a dampener for stocks.

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.

U.S. stocks have rallied over the past month as investors have become more optimistic about the economy. But Ablin added investors may be setting themselves up for a fall by taking a too rosy view of Friday's number.

The Dow Jones industrial average <.DJI> gained 30.46 points, or 0.29 percent, to 10,604.21. The Standard & Poor's 500 Index <.SPX> rose 4.46 points, or 0.39 percent, to 1,141.60. The Nasdaq Composite Index <.IXIC> dropped 2.53 points, or 0.11 percent, to 2,298.57.

The top performer among S&P sectors was the financials <.GSPF>, which gained 2.5 percent after Credit Suisse upgraded Bank of America to outperform. The stock, a Dow component, climbed 4.6 percent to $17.13, while the KBW Banks index <.BKX> shot up 4.8 percent.

GE shares rose 6.2 percent to $16.40 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 0.9 percent.

Still, Abercrombie & Fitch sank 8.8 percent to $33.03 after December sales fell 19 percent, and American Eagle Outfitters Inc slid 3.6 percent to $16.92.

Sears Holding Corp was a bright spot, rising 10.9 percent to $98.59 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 2.2 percent to $594.63.

Some of the euphoria from the last few days is taking a bit of a pause, said Michael James, senior trader at regional investment bank Wedbush Morgan in Los Angeles, commenting on the weak technology sector.

There are certainly questions being asked: Is this going to be indicative of a further sell-off or are we just pausing before resuming the uptrend?

Shares of home builders took off after Lennar Corp posted its first quarterly profit in almost three years, pushing its shares up 15.4 percent to $15.81. The Dow Jones home construction index <.DJUSHB> rose 7.6 percent.

The Dow's top drag was 3M Co , falling 0.4 percent to $83.38 after JPMorgan cut the rating to neutral. [ID:nSGE6060H4]

(Reporting by Edward Krudy; Editing by Jan Paschal)

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